Amazon Private Label Podcast for FBA Sellers - Sell more on Amazon FBA, e-Commerce Podcast - AmzSecretshttps://amzsecrets.com
The Amazon Private Label Podcast focused on Amazon FBA, Selling on Amazon, Sell more on OnlineThu, 15 Feb 2018 14:44:11 +0000en-UShourly1https://wordpress.org/?v=4.9.4David Aladdin from Amz Secrets - focused Amazon Private Label Podcast is on advanced selling strategies on Amazon FBA, including retail Arbitrage, Amazon Fulfillment by Amazon (FBA), Amazon Private Labeling, and Amazon White Labeling. Discover how you can apply and use these secrets to create a business that will allow you to love what you do, wherever you are. The show will discuss topics like Amazon Sea Shipping, product selection, sourcing, private labeling, promotions, advertising, marketing, list building, Facebook PPC, and everything that works and doesn’t work within the Amazon Eco-System. My overall goal is to make us wildly successful within Amazon.David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.cleanDavid Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.david@amzsecrets.comdavid@amzsecrets.com (David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.)AmzSecrets.comAmazon Private Label for FBA SellersAmazon Private Label Podcast for FBA Sellers - Sell more on Amazon FBA, e-Commerce Podcast - AmzSecretshttp://amzsecrets.com/wp-content/uploads/powerpress/itunes.pnghttps://amzsecrets.com
david@amzsecrets.comNaples, FlAS 94: The best entrepreneurs have better systems than you, with Aaron O’Sullivanhttps://amzsecrets.com/94-best-entrepreneurs-better-systems-aaron-osullivan/
Wed, 04 Oct 2017 16:49:54 +0000http://amzsecrets.com/?p=6784https://amzsecrets.com/94-best-entrepreneurs-better-systems-aaron-osullivan/#respondhttps://amzsecrets.com/94-best-entrepreneurs-better-systems-aaron-osullivan/feed/0Today I’ve got another invincible king on the, Aaron O’Sullivan. Aaron is a serial entrepreneur who has been building brands on Amazon since 2013, scoring several million in product sales.
He has spent the last 3 years building teams based in the Philippines, helping scale up one team to 45 staff by building all of the Amazon systems and processes to run multiple brands.
Aaron has clients doing anywhere from $10k > $500k per month on Amazon / e-Commerce, many of whom have become the bottleneck in their business, slowing the growth of their company and preventing them from scaling to the next level.
In this episode you'll learn:
Systems to build in your Amazon business
System building strategies
Tools to use for your systems building
Best tools for systems
Aaron's mission in life and business
And lots more, stay tuned for transcript.
Note-worthy links:
https://www.facebook.com/systemise
https://www.facebook.com/groups/amazonpowerseller
www.systemscultureimpact.comToday I’ve got another invincible king on the, Aaron O’Sullivan. Aaron is a serial entrepreneur who has been building brands on Amazon since 2013, scoring several million in product sales.

He has spent the last 3 years building teams based in the Philippines, helping scale up one team to 45 staff by building all of the Amazon systems and processes to run multiple brands.

Aaron has clients doing anywhere from $10k > $500k per month on Amazon / e-Commerce, many of whom have become the bottleneck in their business, slowing the growth of their company and preventing them from scaling to the next level.

]]>Today I’ve got another invincible king on the, Aaron O’Sullivan. Aaron is a serial entrepreneur who has been building brands on Amazon since 2013, scoring several million in product sales. - He has spent the last 3 years building teams based in the Ph...
He has spent the last 3 years building teams based in the Philippines, helping scale up one team to 45 staff by building all of the Amazon systems and processes to run multiple brands.

Aaron has clients doing anywhere from $10k > $500k per month on Amazon / e-Commerce, many of whom have become the bottleneck in their business, slowing the growth of their company and preventing them from scaling to the next level.

In this episode you'll learn:

* Systems to build in your Amazon business
* System building strategies
* Tools to use for your systems building
* Best tools for systems
* Aaron's mission in life and business

www.systemscultureimpact.com]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean48:06AS 93: Pivoting to 1 Million Dollar Paydays with Murray Priestleyhttps://amzsecrets.com/93-pivoting-1-million-dollar-paydays-murray-priestley/
Tue, 05 Sep 2017 19:59:10 +0000http://amzsecrets.com/?p=6657https://amzsecrets.com/93-pivoting-1-million-dollar-paydays-murray-priestley/#respondhttps://amzsecrets.com/93-pivoting-1-million-dollar-paydays-murray-priestley/feed/0Today I’ve got another invincible king on the, Murray Priestley. Murray is a partner at Global Private Partners, a private equity investment firm based in Asia and the author of the book The $1M Pay Day.
Murray has a Bachelor’s degree in Engineering & Computer Science from Monash University. He has lived and worked in over 9 countries, and through his journey has been the executive
And this is the AmzSecrets.com Show, episode 93! Before we jump in quick announcement. I will be in China on the 14th, and always looking to mastermind when I’m out of my castle, shoot me an email and I’ll try my best to meet up with you.
What you'll learn:
How to scale your Amazon business and beyond
How to pivot when things are going wrong
Murray Priestley's journey into entrepreneurship
Mistakes along the way
How to save $500,000 dollars
How to scale your brand and businesses with you in the mix
How to build an Amazon FBA business
How to know what your good at
Making critical decisions in your business
Understanding mistakes and selling your businessAnd much more! Stay tuned for show notes.
Show links:
http://1MPAYDAY.com - Get his book :)Today I’ve got another invincible king on the, Murray Priestley. Murray is a partner at Global Private Partners, a private equity investment firm based in Asia and the author of the book The $1M Pay Day.

Murray has a Bachelor’s degree in Engineering & Computer Science from Monash University. He has lived and worked in over 9 countries, and through his journey has been the executive

And this is the AmzSecrets.com Show, episode 93! Before we jump in quick announcement. I will be in China on the 14th, and always looking to mastermind when I’m out of my castle, shoot me an email and I’ll try my best to meet up with you.

What you’ll learn:

How to scale your Amazon business and beyond

How to pivot when things are going wrong

Murray Priestley’s journey into entrepreneurship

Mistakes along the way

How to save $500,000 dollars

How to scale your brand and businesses with you in the mix

How to build an Amazon FBA business

How to know what your good at

Making critical decisions in your business

Understanding mistakes and selling your businessAnd much more! Stay tuned for show notes.

]]>Today I’ve got another invincible king on the, Murray Priestley. Murray is a partner at Global Private Partners, a private equity investment firm based in Asia and the author of the book The $1M Pay Day. -
Murray has a Bachelor’s degree in Engineering & Computer Science from Monash University. He has lived and worked in over 9 countries, and through his journey has been the executive

And this is the AmzSecrets.com Show, episode 93! Before we jump in quick announcement. I will be in China on the 14th, and always looking to mastermind when I’m out of my castle, shoot me an email and I’ll try my best to meet up with you.

What you'll learn:

* How to scale your Amazon business and beyond
* How to pivot when things are going wrong
* Murray Priestley's journey into entrepreneurship
* Mistakes along the way
* How to save $500,000 dollars
* How to scale your brand and businesses with you in the mix
* How to build an Amazon FBA business
* How to know what your good at
* Making critical decisions in your business
* Understanding mistakes and selling your businessAnd much more! Stay tuned for show notes.

Show links:http://1MPAYDAY.com - Get his book :)]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean54:14AS 92: Build the brand, 180k/month sales on Amazon and Shopify with Dr. Travis Ziglerhttps://amzsecrets.com/92-build-brand-180kmonth-sales-amazon-shopify-dr-travis-zigler/
Tue, 29 Aug 2017 04:39:25 +0000http://amzsecrets.com/?p=6618https://amzsecrets.com/92-build-brand-180kmonth-sales-amazon-shopify-dr-travis-zigler/#respondhttps://amzsecrets.com/92-build-brand-180kmonth-sales-amazon-shopify-dr-travis-zigler/feed/0Today I've got Dr. Travis Zigler, who graduated in 2010 from The Ohio State University College of Optometry with Magna Cum Laude honors. He is the co-founder of Eye Love, eyelovethesun.com, whose mission is to end preventable blindness. Dr. Travis and his wife, Dr. Jenna Zigler, use the profits from Eye Love to fund free and low cost clinics in South Carolina and Jamaica. They also started a charity called the Eye Love Cares Foundation, eyelovecares.org, which provides exams, glasses and sunglasses for those in need, free education, and scholarships for students that align with their mission.
Eye Love does an average of $180,000 per month on Amazon and Shopify. He has created highly engaged communities of over 2,000 people and growing daily.
In this episode you'll learn,
How Travis started his business
How Travis acquired businesses and leverages them together
How he's built a business from passion
How to build a brand leveraging SEO and content
The people behind Eye Love and the charitable actions of the company
The growth and decisions behind the company
Strategic decisions and business operating
Lots of golden nugets. Did I say lots!?
Transcript coming soon
Dr. Travis Zigler
1. Business Igniters on Facebook: https://www.facebook.com/Business-Igniters-165108987349546/
2. Facebook Profile: https://www.facebook.com/Dr-Travis-Zigler-261315727610737/
3. Eye Love: https://eyelovethesun.com/
Ashlin Hadden Insurance Agency
http://www.voldico.com/find-an-agent/ashlin-hadden/
DAVID ALADDIN: Great having you on the show, Travis.
TRAVIS ZIGLER: Hey, David thanks for having me.
DAVID ALADDIN: Can you take us to the beginning before you guys were selling on Amazon and Shopify? Where did your journey begin?
TRAVIS ZIGLER: Now it began I mean back in college. I mean, we, my wife went to the University of Michigan, I went to the Ohio State University for under grad and we ended up meeting and started dating when she came to optometry school in 2007 and I was a second year she is a first year. We dated throughout Optometry school and started practicing in Columbus, Ohio from 2010 to 2015. And 2015, we worked for my uncle in Columbus, Ohio, and we decided we wanted to go off on our own and do our own things. So we actually pretty much quit our jobs, moved across the country to South Carolina and started two new practices from scratch and then with, whenever you’re staring up a new practice it tends to be a little slower at first while your gaining that initial clientele similar to your Amazon business.
You’re not selling two to three hundred units a day—you're selling one to two units a day and you're building up from there and practices the same way. And so I was bored and we found the amazing selling machine was on its fifth version in May 2015 and we bought it and just went through the course and didn’t follow the training for picking out a product. Just did what we know and what we loved which is eyes, and just going to went from there. So May or July 2015 in when we got our first sale and we did the typical rookie mistake of only ordering a hundred units, selling out in seven days and realizing, wow, this is real. So then we brought in an investor and we dump about twenty thousand of our own dollars in and grew from there.
DAVID ALADDIN: Okay. So like before the whole Amazon thing, you guys joined the practice for five years. When did you get the, you had this concept of just like living you know the safe area of the job and whose idea was it first, you or your wife’s?
TRAVIS ZIGLER: My wife is definitely. She likes to be safe. Very, very safe so it was definitely my idea but probably back in 2012 or 2013, I read a book, called Rich Dad, Poor Dad, which I'm sure a lot of you readers have read and I’m sure it has changed a lot of their lives. And so we got in the real state. We bought our first duplex about a year later and we still have the duplex actually.Today I’ve got Dr. Travis Zigler, who graduated in 2010 from The Ohio State University College of Optometry with Magna Cum Laude honors. He is the co-founder of Eye Love, eyelovethesun.com, whose mission is to end preventable blindness. Dr. Travis and his wife, Dr. Jenna Zigler, use the profits from Eye Love to fund free and low cost clinics in South Carolina and Jamaica. They also started a charity called the Eye Love Cares Foundation, eyelovecares.org, which provides exams, glasses and sunglasses for those in need, free education, and scholarships for students that align with their mission.

Eye Love does an average of $180,000 per month on Amazon and Shopify. He has created highly engaged communities of over 2,000 people and growing daily.

DAVID ALADDIN: Can you take us to the beginning before you guys were selling on Amazon and Shopify? Where did your journey begin?

TRAVIS ZIGLER: Now it began I mean back in college. I mean, we, my wife went to the University of Michigan, I went to the Ohio State University for under grad and we ended up meeting and started dating when she came to optometry school in 2007 and I was a second year she is a first year. We dated throughout Optometry school and started practicing in Columbus, Ohio from 2010 to 2015. And 2015, we worked for my uncle in Columbus, Ohio, and we decided we wanted to go off on our own and do our own things. So we actually pretty much quit our jobs, moved across the country to South Carolina and started two new practices from scratch and then with, whenever you’re staring up a new practice it tends to be a little slower at first while your gaining that initial clientele similar to your Amazon business.

You’re not selling two to three hundred units a day—you’re selling one to two units a day and you’re building up from there and practices the same way. And so I was bored and we found the amazing selling machine was on its fifth version in May 2015 and we bought it and just went through the course and didn’t follow the training for picking out a product. Just did what we know and what we loved which is eyes, and just going to went from there. So May or July 2015 in when we got our first sale and we did the typical rookie mistake of only ordering a hundred units, selling out in seven days and realizing, wow, this is real. So then we brought in an investor and we dump about twenty thousand of our own dollars in and grew from there.

DAVID ALADDIN: Okay. So like before the whole Amazon thing, you guys joined the practice for five years. When did you get the, you had this concept of just like living you know the safe area of the job and whose idea was it first, you or your wife’s?

TRAVIS ZIGLER: My wife is definitely. She likes to be safe. Very, very safe so it was definitely my idea but probably back in 2012 or 2013, I read a book, called Rich Dad, Poor Dad, which I’m sure a lot of you readers have read and I’m sure it has changed a lot of their lives. And so we got in the real state. We bought our first duplex about a year later and we still have the duplex actually. It’s in Columbus, Ohio, and we just have two tenants rent from us and we just realized that the path to ultimate wealth is owning a practice. We looked at the owning a practice up in Ohio and we just wanted to get out the winner and that’s why we kind of made the plunge to come all the way down here in South Carolina.

DAVID ALADDIN: What does it take to start like a practice?

TRAVIS ZIGLER: A lot. A lot of patience and so, when you’re first starting out a practice you pretty much—we actually bought an existing practice but it was actually on the downhill. It would—did to about 220 its first year, 180 at second year, and then the third year it did 120,000 and that’s when we came in and purchased it. We got a really good deal on it and unfortunately, it was kind of had a bad rep in the community so we had to build that back up and we did that pretty well just by getting out and getting involved in the community like a typical business that’s local does. And you just accept every insurance plan possible even if it’s not profitable, and very similar too when you launch a product, you just try to do things for free for people, you find influencers in the community, and you are the sneezers in the community, whatever you want to call, and you give him free eye care, or you give him free glasses and don’t tell everybody.

DAVID ALADDIN: So, do you mind saying how much you guys bought that business for?

TRAVIS ZIGLER: Yes. So we bought it. We bought both locations for about $67,000.

DAVID ALADDIN: Did that include like the physical property and everything?

TRAVIS ZIGLER: So the one location has a physical property included everything inside of it. It was actually a rental. So they rented the—it was a duplex building and we rented half of it and then all the stuff that was inside of it that came with it: glasses, all the equipment, computers. The other location is inside a Walmart so we don’t own any of the equipment. We just own the patient’s charts.

DAVID ALADDIN: Why do you think the people sold it?

TRAVIS ZIGLER: I know why they sold it. The owner was going through a lot of problems in life and he was battling a couple different diseases and he was young like us, and so he just decided that it wasn’t for him anymore. And it was perfect for two doctors to come in and grow and he just didn’t have the time and at the energy, definitely not the energy to commit to growing it anymore which shows in the early revenues. So going from 220 to 180 to 120 over a three-year span shouldn’t happen in any practice.

DAVID ALADDIN: Definitely not. Like the margin on that type of businesses is—it’s mostly service business, right?

TRAVIS ZIGLER: It’s all service base. We do have an optical, we did have an optical on our old office that we sold and that old optical—the optical makes up about 60%-70% of our revenue which is glasses, contact lenses, everything like that.

DAVID ALADDIN: So, at these clinics you can also sell your products as well, right?

TRAVIS ZIGLER: Yeah, we do. And so, we didn’t have products at beginning but now we do in our Walmart location. We sell all of our consumables there.

DAVID ALADDIN: Very cool and then, okay, so you guys acquire this business for about 66K and then you guys sold it at some point?

TRAVIS ZIGLER: Yeah, we sold one of them. So, we sold the private practice which had all the equipment and the glasses and everything and we went up selling it for about I don’t—yeah, it was around 150 mark.

DAVID ALADDIN: Nice.

TRAVIS ZIGLER: And then we still have the other location which is kind of our cash cow and that doesn’t really have any overhead. It has three thousand dollars a month in over head so after we see thirty patients in a month it pretty much pays for or that’s all profit.

DAVID ALADDIN: And are you guys the one’s running the business or do you have like employees that do it now for you?

TRAVIS ZIGLER: We still run the business. I work a day and half a week and my wife works two days a week, and we only work three and a half days per week. And those three and half days rotate so, we don’t work… we work like a, it’s called a schedule crunch. We work Thursday through Saturday one week and then we work Monday through Wednesday the next week and so it makes it very nice because we’ll have sixty seven day weekends to work on our business on our eCommerce business and then it allow us just more freedom to travel and do what we love.

DAVID ALADDIN: You guys are in a very interesting situation because you have this retail side and then you also have this eCommerce side. Do you see the eCommerce starting to take over the retail side?

TRAVIS ZIGLER: Head to the first year.

DAVID ALADDIN: Jeez. So what’s, I know we’re jumping ahead but what’s the plan?

TRAVIS ZIGLER: The plan right now is we have a contract with Walmart that we’ll stay in there until January and then we’re pretty much evaluating everything right now if we want to keep it or if we want to get rid of it. But we’re in talks of selling that practice right now with somebody and he might take it over in January. And we’re pretty excited about that because he’s going to be a great doctor coming in and filling in our shoes and then we may consider moving so we want to get around people that think more like us because in South Carolina it’s tough to find that entrepreneur crowd. It’s out there but it’s very tough to find so we’re going to go somewhere that’s more entrepreneur friendly.

DAVID ALADDIN: Any ideas?

TRAVIS ZIGLER: Austin.

DAVID ALADDIN: Yeah.

TRAVIS ZIGLER: [Crosstalk 00:08:35] just Austin.

DAVID ALADDIN: Well, they just got hit by the hurricane. I hope they’re doing okay.

TRAVIS ZIGLER: That’s okay. We got hurricanes here too.

DAVID ALADDIN: Very cool Okay so, how did—I Love is a different brand from the ophthalmology in that practice, right?

TRAVIS ZIGLER: Yep so…

DAVID ALADDIN: Yeah, what is the belief behind that?

TRAVIS ZIGLER: Just keeping things separate. You always want to have as many businesses as you can separate just for protection purposes. But we want to keep all eCommerce things eCommerce and then all retail things retail. So when I go to buy our consumables from our eCommerce business I actually invoice our business and my retail business actually pays for all the consumables because we do have a whole sale model as well.

DAVID ALADDIN: Very interesting. So your one business is paying the other business. Buying from the other business. I guess for tax reason that makes it very clear as well.

TRAVIS ZIGLER: Yeah and you can do this with if you have a building, a physical building you want that building to be in a separate LLC or S Corp where ever you’re doing and then you want your business to rent it out from your other business.

DAVID ALADDIN: I’ve heard about that. Let’s talk more about that actually so, you have an LLC that holds the building that you run thing. And then it’s—how does that work? Can you go in to detail?

TRAVIS ZIGLER: We don’t own the building anymore, so we don’t own the building that we’re practicing now so we just pay rental to Walmart because it’s their building, but so if you had a physical property that you built like a warehouse and you bought it through your Amazon business or your eCommerce business, you do not want it to be in a same holding as that so you’d create a separate LLC that this business owns that this other business owns. And then your eCommerce business will then pay that business to rent the space just like you would if you rent it to anybody else. And you can even take this a step further in any equipment that you owned inside the building.

You can then create a separate business for the equipment that you own and run the equipment to your eCommerce business as well, and what that’s doing is it’s just protecting yourself, and as long you keep it separated and that’s pretty much piercing the corporate veil as you want to avoid that. But as long as you keep everything separated, it’s going to be better for you from a protection stand point because, I mean I’m no attorney or anything but this is just what we do. And if somebody sues our Optometry business, they can’t get anything from our eCommerce business and vice versa, and then if somebody sues your eCommerce business they can’t come after the building, the building is in a separate LLC.

DAVID ALADDIN: You know that sounds very smart. I should definitely concern that especially as I’m starting another brand.

TRAVIS ZIGLER: Yeah.

DAVID ALADDIN: I guess for me like I just want to get out and start selling on a new brand and all this legal jargon gets in the way of that. Where do you guys have all this time to do this kind of stuff?

TRAVIS ZIGLER: Well, I think entrepreneurs always have that fire first, ask questions later aim, you know. Fire first and then aim. And which we have a great team around us. We have four attorneys that we consult with on a regular basis for different areas of our business and then we have a CPA, an accounting team, a book keeper. Sounds expensive but it is really not. I mean, we have two of our attorneys on retainer for $40 a month and then whenever we need them they answer pretty basic questions at no cost and they go over five documents a month at no cost.

And then we have a trademark attorney for any trademark issues that we have which we’ve had trouble with trademarks before, and he charges now three hundred dollars an hour but it’s not really that bad because we talk to him maybe one time a month and it cost you $200 a month. And then our accounting team cost you know $600-$1000 a month but they do book keeping, accounting, and they do tax planning as well. So if you don’t pay for it in the front end you’re going to pay for it in the back end which is April of every year.

DAVID ALADDIN: Very interesting. So, you guys built your brand completely around something that you love. A lot of sellers tend to go one way or the other. They sell products they just sell and you guys sell products that you love and are passionate about. And from like looking or listening to you now, it sounds like it was just a no burner to do that. But let’s talk about your reason for doing that.

TRAVIS ZIGLER: So we followed the course, the ASM course to a T. We looked in for products to launch. We looked in the baby niche. We looked in this niche. We looked in a bunch of different areas and we’re just like man, if people start asking questions about these we’re not going to be able to answer them because we don’t know anything about babies because we don’t have any. So, that’s always key. And we’re like we know eye care. Why don’t we just stick with eye care? So we looked into sunglasses which are probably the most competitive market in the world. And because you’re competing with RayBan and Oakley and Nike and Gucci and Prada; any name brand that you could think of has sunglasses so we’re just like let’s just try it and see what happens and it worked.

It’s hard though because sunglasses are an area that we have about probably ten pair now that we still sell, and that’s kind of our cash cow. We just sell those for the profit and then we invest all those profits back into our disruptive part of the company, which we could go into later if you want, but sunglasses are tough because you have to have an FDA approval to import them. You have to have an FDA facility over where we have them manufactured. They have to be FDA certified.

They have to have passed certain standards which most people don’t know any of this and even we didn’t know everything that went into it until we started selling sunglasses but we mainly just stopped doing product research and said, let’s just do sunglasses. Let’s just try it. And then a year later our model shifted to consumables in the eye care space so we sell dry eye supplements and sprays and we’re getting into drops. And we sell things for macular degeneration because when somebody asks us a question about sunglasses or blue light blocking glasses or if they ask us anything about the consumables, we can answer them because we’re experts in that space. And we can go into community building more later but it’s kind of…everything has been encompassed around the eye ball which is what we know so well.

DAVID ALADDIN: I like that. It’s definitely different to hear a lot of sellers come on the show and they just like this thing sells, let’s sell it but you guys are doing it two prong approach. Providing feedback, expertise to your customers and building new products based on that feedback, which I guess other sellers can do but you know, no one would have that kind of foresight to go into…what was that eye drop you said?

TRAVIS ZIGLER: The eye spray.

DAVID ALADDIN: The eye sprays exactly like I would never launch that kind of product.

TRAVIS ZIGLER: The funny thing about the eye spray is—so most of our products, we go for one that sells five to ten to twenty a day. We don’t really go for that home run hit that sells a hundred a day but the eye spray is actually, we’re doing about 50-70 a day right now.

DAVID ALADDIN: Solid. Yeah.

TRAVIS ZIGLER: And it’s really become a disruptive product because it’s innovative technology in the eye care space. We found it accidentally. Our actual customer brought it to us and I reached out to the manufacturer and just said, will you private label this? And he said, of course, we would. And it’s a prescription medication that we made over the counter. And so we can’t make claims like it treats dry eye or treats whatever conditions we’re treating with it. We can just say it helps clean the eyelids. And so that’s the whole FDA route with consumables is you can’t claim it does something unless you have it FDA approved to treat that and that can cost a hundred million dollars to get that approval. So the prescription spray is it did pay that and they are approved for dry eye and everything but we’re not, but it’s the same pretty much formula. Very similar.

DAVID ALADDIN: And I feel like that’s a golden nugget right there. There’s definitely a boundary that you’ve gotten into that many other sellers definitely can’t get to. And you also have this relationship with the manufacturer that you know you kind of pushed the private label onto him versus you know you were just kind of searching on alley-valley for a product. How did you build that relationship—

TRAVIS ZIGLER: Yeah. This is a—

DAVID ALADDIN: By the way? And you don’t have to go too deep into detail about how that comes in about.

TRAVIS ZIGLER: No! That’s fine. I have no problem at all. It’s pretty simple actually. It’s, like I said a costumer brought us this product and said, what do you guys think of this? And I looked at the ingredients and it’s the exact same ingredients as a prescription thing that I do. So I’m just like, man, this is over the counter so we should look into this, and I literally went to the website, found the email of the CEO, emailed him, said could we set up a phone call? And he called me literally five minutes later. This is on a Sunday afternoon, and we talk for about two hours and we made a deal right then and signed an NDA and the rest is history.

DAVID ALADDIN: That’s a hustle right there!

TRAVIS ZIGLER: It literally was that simple.

DAVID ALADDIN: Yeah.

TRAVIS ZIGLER: I mean it can be. It’s not always that simple but we did great.

DAVID ALADDIN: No! You made it sound simple. I mean, you had to reach out to the CEO. You had to put the purchase order that CEO had to be able to fulfill that kind of order. There’s like a lot of thing that had to happen in order for you to be selling 80 units per day out of this random, aha! Kind of product you know.

TRAVIS ZIGLER: Yeah. We just launched it two months ago, so we’re just starting to get repeat orders and it’s been a pretty awesome product.

DAVID ALADDIN: What’s the life cycle kind on that kind of product?

TRAVIS ZIGLER: The life cycle on it? What do you mean by life cycle?

DAVID ALADDIN: When they renew?

TRAVIS ZIGLER: So, we have a one-month supply and after they buy the one month supply, we want to shift them over to the four months’ supply.

DAVID ALADDIN: It’s awesome!

TRAVIS ZIGLER: But, it’s kind of neat because people will actually subscribe to the one month supply and they’re paying more. I mean our four months supply is only double the cost and you’re getting two more months for free pretty much and there are a lot of people just see the one month supply and recurring revenue.

DAVID ALADDIN: Yeah! That’s just thinking too smart to buy the four months’ supply. They didn’t know that.

TRAVIS ZIGLER: We actually email them afterwards about it and we have an email that goes out about a month later after their one outs this purchase and it says, join our get on up prescription—our subscription plan, and that points them to that page that all you can do is buy the subscription product.

DAVID ALADDIN: I feel like that in itself is a golden nugget to it. All my products are not subscription based and I don’t even know how awesome the people that have all the subscription type of beauty products and reoccurring products, how they’re doing, but it seems like a gold mine that I—

TRAVIS ZIGLER: Yes.

DAVID ALADDIN: Haven’t tapped at all.

TRAVIS ZIGLER: Yeah. You’d be surprised by, you say you don’t have a subscription product, but we have costumers that order the same pair of sunglasses every single month.

DAVID ALADDIN: That is odd.

TRAVIS ZIGLER: And it’s not because they break they just order them to put them someone else because we are at a good price point that if they do break, it doesn’t matter because, you know, if they lose them, or anything like that it’s not a big deal.

DAVID ALADDIN: Did you like get in to this relationship understanding that you guys would be in business together? Or—

TRAVIS ZIGLER: That was actually more like a—

DAVID ALADDIN: More of like a romantic thing at first then it evolved?

TRAVIS ZIGLER: So, the first question I asked her is if she wanted to, you know, do a crazy amount of money on eCommerce. No, absolutely not. We actually first met at the bar, oddly enough and it was, I was a first year in Optometry school and she was a senior at the University of Michigan and I was a first year at Ohio State. And if you know anything about that rivalry, it’s a pretty intense rivalry. Some people say it’s the most intense in all the sports, and I had a unique shirt on that’s saying things about Michigan and that’s why she came up to me and start talking to me. And that’s how we met. And she came to Optometry school and that’s, we always thought we’d just kind of work for somebody our whole lives and maybe own a practice someday. And how our life shifted two years ago and we moved to South Carolina and started our own practice and then started this and now we’re talking about possibly even retiring from practice just to focus on this business and we’re still kind of practicing on here.

And I guess to go further into your question, my wife has different mind that I am, so we’re the exact opposite. When we ever do a personality profile, we are the extreme opposites. I’m a quick start, she’s not. She’s a logistics, so I think of ideas, I do a lot of sales and marketing. I do a lot of video content. I do podcast like this one right here and I do a lot of health podcast. And then she does the logistics, the warehousing, the ordering from manufactures, the getting it into Amazon, you know, doing all that because that’s where her, that’s where she—like she’s great at that. She’s great at spreadsheets, I am terrible. And then we have other team member as well that will probably take her place in that and so she can focus on more content creation as well because she’s a great writer as well. She does all our copy and I do a lot of photography because I love the art side of things.

DAVID ALDDIN: That, I feel like there are a lot of golden nuggets. Like one, you’ve got to work crazy t-shirt when you’re out. That actually changed your life if you think about it.

TRAVIS ZIGLER: It really did! Yeah. She probably wouldn’t have come up to me and we probably—I can go deeper into that story too because she took a picture and this is when Facebook just started, and that was like 16 colleges and our college’s won and her university was the other and ended up on Facebook, and my roommate who was at the bar that night ended up, he went to high school with her and he’s like, “What are you doing in this picture with some of my high school classmates? and I just, “We just randomly met,” and that’s how we started talking.

DAVID ALADDIN: That’s interesting.

TRAVIS ZIGLER: Yeah! It’s crazy story and yeah! It’s a good one. It’s not just we met at a bar.

DAVID ALADDIN: It’s unique. I’ve actually—like for me I’ve been in a relationship and it didn’t work out because wasn’t of the entrepreneur breed. You know, she wasn’t about me working outside of the 8 to 5 job and there is just so much clash in. You figured out or how to work it together, you know, it’s definitely a very unique situation to so.

TRAVIS ZIGLER: I think we just go along this journey together and we constantly are building up ourselves and educating and we’re doing that all together and we started the journey together which is a big difference from trying to bring somebody in to this world, then creating the word together, and where you’re trying to bring somebody in, we created it together.

DAVID ALADDIN: They don’t understand?

TRAVIS ZIGLER: No they don’t and sometimes—

DAVID ALADDIN: She didn’t want, yeah.

TRAVIS ZIGLER: I don’t know if she understands.

DAVID ALADDIN: She didn’t want me like working on this business all the time and I had to be home at five, but I was home but I—you know, there’s just so much conflict and I’m sure a lot of the listeners have similar issues around this. Do you ever worry about the conflict that—the conflicts of having a conflict in business move over to your relationship?

TRAVIS ZIGLER: Not at all, I mean we… everybody fights and we don’t fight that much. We argue, we do it, we all that, but it’s usually just small stuff. We always try to think of, you know, it this going to matter in a year?

DAVID ALADDIN: Right.

TRAVIS ZIGLER: Or is this, I mean yeah! We’ve had some really hard times in business this year. 2016 went so well and 2017 has not gone so well at all. We still have great sales, but the bottom line hasn’t been that good and there has been more, I wouldn’t say fighting, but figuring out where our rules are and figuring out where we want to go next with this business and how big we want to take it. And we’ve just had some tough times that surely have taught us a lot about ourselves and a lot about how we are in business.

DAVID ALADDIN: I feel like we age faster in this type of business.

TRAVIS ZIGLER: You can!

DAVID ALADDIN: Because you’re processing a lot more information than when you’re working for five years at that Optometry job. I think the learning curve has to be faster, it has to be more intense or you’re losing money.

TRAVIS ZIGLER: And I’ll battle that and argue with you just a little bit that, you’re doing something you love or you should be, and I love seeing patients, but I don’t love it more than I love eCommerce, and that’s why we sold the practice to focus on this because this is where I found my true passion is, helping others succeed in eCommerce and then also seeing us succeed and then also the group that we have, we have a Facebook community called, The Dry Eyes Syndrome Support community, and we’re growing by about a hundred per week and we’re at about 2300 right now. And just providing value to them we do a weekly video series that we just started last night.

5pm we go live. They ask us questions and we just answer them because a lot of times now a day’s people like go to the doctor’s office they just don’t get the time that they used to because insurance reimbursements were going down. Doctor’s time is becoming more and more valuable but they’re getting reimbursed less and so we’re creating that kind of outlet for them to answer their questions and the goal, we do it for free and the goal of the community is in our creating free value for them, we hope they then will come buy our products and we’ve created writing fans doing that and it’s something that we love doing it’s not just we’re doing it to make sales and that’s where a lot of people get hung up because they’re just trying to make the next sale. We don’t care about the sales we just, you know, we just do it to help people and in turn what’s going to happen as you help more people? More people are going to buy your product.

DAVID ALADDIN: And I feel like this method that your approaches creating high quality content based on the products that you sell, it doesn’t apply to people that are just launching any product that sells, you know, not creating the brand.

TRAVIS ZIGLER: You got it, yeah.

DAVID ALDDIN: I had this argument with many guys, you know, should I create the brand or should I just create the product that sells or should I just wholesale products, and I think this is the way to go.

TRAVIS ZIGLER: I 100% agree. I helped a lot of entrepreneurs that are getting started in this space and we’re part of the group that helps newbie’s and then a kind of more experienced group and then that really experienced group that’s usually higher than our level and I always tell them the same thing, they always asked me the same thing, what product should I pick? And I’d say, what brand do you want to build? And I say, grow an audience first and the protocol comes from that, and I constantly push that and then they say, well what should I build my brand around? And I’d say that’s your choice. We chose eyes because we’re optometrist. But it’s, I mean you can become an expert in anything and I always tell them that an expert is just somebody that knows more than the person that you’re teaching. And so we’re eye doctors.

We trained for 4 years to become eye doctors and then we still educate ourselves on a daily basis on eye care. I set up Google alerts for the key terms dry eye and blepharitis, and any eye disease, and I read all the latest news that’s on those topics. And you can do that in any field you want. You can, I mean if you’re in travel and you want to say, let’s say travelling to China could be your niche and you could put that into Google alerts and then you’re going to get information on travelling to China every single day and then you can create a group around that and then you can create a travel company around travelling to China, and you create this raving audience of people that love travelling to China, we do that often and they’re going to help each other out, you’re going to help them by bringing them new content and then you could ask them what products to build for them.

DAVID ALADDIN: I say I feel like if you can build a community for dry eyes, anyone can create a community because that is like a very niche subject. And you found thousands of people—that’s thousands, right? Or hundreds right now?

TRAVIS ZIGLER: We’re at 2300 right now.

DAVID ALADIN: Exactly! Like there is no excuse, unless you’re selling like random products off the shelf, but then you can still create one bid. I think the real secret there’s that you’re passionate about what you do. There’s absolutely no way I think a community can be created without the passion behind that.

TRAVIS ZIGLER: You’re going to get sick of doing it, if you don’t do it or if you do something you don’t love, you’re just going to, you’re going to go on and I got to post push something today and—where I like, I get an idea when I read a good article I hop on Facebook live right away and I’ll do a quick video and then we have a team in place around that too, then create that video into a paid download then put it into YouTube, then they’ll see you YouTube and then they create a blog post out of it. Transcribe the video, put it into paragraph form and then they put the time stamp on the bottom and we do that to create blog content and it just something that you got to love doing it, you got to love travelling to China, if you’re going to create a travelling to China group. You got to do it and if you don’t love it, you’re not going to do it.

DAVID ALADDIN: I’m actually going to China on the 12th if anyone is going to be there. I don’t know if you’ve been to China, yet, have you?

TRAVIS ZIGLER: I haven’t. No.

DAVID ALADDIN: You planning of going?

TRAVIS ZIGLER: I would love to; we have a baby during November so it’s going to be—

DAVID ALADDIN: Complications.

TRAVIS ZIGLER: Yeah, it’s going to be probably next year. We have two retired grandmas so that should help us make our trip to China a little easier.

DAVID ALADDIN: So does your business partner get paid leave?

TRAVIS ZIGLER: She’s on salary so.

DAVID ALADDIN: All right. We’ve been talking about building the community. Is there anything that I left out there?

TRAVIS ZIGLER: No, I mean just create content and I tell people just Facebook loves Facebook lives, so just get on start a community that you want to build it around and just do Facebook live once a week. I do about, you know maybe one to four videos a week and we do one really long one on Sundays, that’s 30 minutes long, we just started that last night. And the great thing about that 30 minute video is we broke it down into 17 smaller videos cause we got the 17 questions and we just created 17 podcasts and , 17 blog posts, and 17 YouTube videos, all based around different subjects on dry eye and that’s going to make us an authority on dry eye, so we can come out 17 post this week base on that one video that we made and I mean we have a team in place to do all that and we’re still, I mean it’s still a work in progress cause we’re learning everyday how to make that better. But just create content and hire team in place to build around that content and you will be an expert in no time.

DAVID ALADDIN: Yeah. I think that’s a genius idea. For the audience listening, when you break down videos based on the question people are searching for that question and that’s why those videos would show up for that specific question versus just one broad video and I actually don’t do that enough. I’m learning, a ton.

TRAVIS ZIGLER: Yes, so we do release the big video that’s 30 minutes long or 45 minutes long. And then we break it down and we actually use like we’ll break it down into each kind of subjects so like an example would be Accutane, a medication that causes dry eye on. We answer that question last night so I go to website called www.answerthepublic.com, and you can type in any keyword, and it will give you the top questions asked by search engine, and so it will give you the what, where, when, why, and how. Surrounding that keywords all put in Accutane there and it will tell me what to title my YouTube video based on search results, so then you put the one that get searched the most as your title as long as it portrays or it is the video as long as you answer the question but that will help you get SEO dues on YouTube, and then on your blog, on everything.

DAVID ALADDIN: Between that and Quora, I don’t know if you’ve ever use that app. It’s authority type of experts forum, kind like of yahoo answers but a hundred times better so—

TRAVIS ZIGLER: How do you spell that?

DAVID ALADDIN: Q-U-O-R-A.

TRAVIS ZIGLER: Q U O… Nice.

DAVID ALADDIN: Almost got me there.

TRAVIS ZIGLER: I’ll go into that. Thanks.

DAVID ALADDIN: And so I actually use that daily but not for SEO reasons but I have never been thought of it from that perspective. It’s awesome. Okay. You’ve mentioned that you use Facebook advertising to build your brand. What’s the strategy there?

TRAVIS ZIGLER: So we do a lot with Facebook advertising. I’m actually… So I hired a Facebook ad expert and he is trying to build around so we’ve created custom audiences around our dry eye products based on Amazon sales. So we downloaded that audience from Amazon, uploaded it to Youtube and then created a look alike audiences according to that custom audience and he is building advertising to a funnel that we do on our website and that funnel is buying our eye lid spray at a discount and then up selling them to our Omega 3 dry eye supplement and that’s what we are working on right now. We are a little expensive right now so we are just an optimization mode and to give you an example, we are at about $40.00 per purchase and so we are losing about $20.00 per sale on that but we are optimizing it as we go and we’ll be doing that for about three months before I really start to look at the numbers.

I try to ignore them right now and then that’s somebody we hired for that. You know hiring somebody for that is about $2,000.00 a month or less. You can really get somebody part time and that way you can focus on bigger things. The Facebook advertising that I am doing, I am actually starting it today, probably this week sometime is I’m actually on a mission to gather ten thousand leads in a month and I’m going to do that by creating a landing page and that landing page is going to give away our free dry eye book that we wrote and then I am going to create a video series that will get access to it as well and that video series just talks more about dry eye and it tells you about products that you can use to help with dry eye and how to cure it and I am actually doing that. I am recording the whole process of me creating this ten thousand lead audience. I don’t know if it’s going to work but I’m going to be recording every step of the way and you guys can see all my faults and I’m doing that actually we have a website there’s four of us that are at this level on Amazon.

We are all at the same level, some are higher than me, and its Business Igniters, on Facebook and you can actually follow me. I’m going to do videos showing you every step of the way that I’m doing that so Business Igniters on Facebook is just a small group that we put together just for fun and we just put out little nuggets here and there and whenever we feel like it. Nothing consistent like you’re doing with your podcast here.

DAVID ALADDIN: I actually go dark for like a few months at a time if I get so overworked. No, that’s awesome. Is ten thousand leads ten thousand emails?

TRAVIS ZIGLER: It’s going to be emails or people on our community. So the goal is I’m going to collect emails and then try to push them over to the community.

DAVID ALADDIN: It’s awesome. See like I feel like that was never my expertise, building these like crazy funnels of landing page, free book, up sell, what… is there some type of up sell software or tool that you’re using to once they buy this product then you start marketing the month the next product.

TRAVIS ZIGLER: So this will be a free product. The dry eye book will be a free download PDF, but we use Zipify pages, Ezra Firestone software. I think—

DAVID ALADDIN: I see.

TRAVIS ZIGLER: Yes, smartmarketer.com or something like that. Zipify pages is a landing page software that’s built into Shopify and so you have other things like lead pages and all that that are kind of separate…quick funnels as well, but Zipify pages are actually a landing page software integrated with Shopify so it’s really nice. And then once you gather the lead they’ll go into an email sequence and that email sequence will then try to get them. It will educate them while trying to get them to buy other products as well and so we’ll probably offer on the thank you page just like a one-time deal where they can download the book and then get like 20% off on their first purchase but in the email sequence there’s going to be discount codes and ability to purchase different things and that too.

DAVID ALADDIN: Do you find like a certain method working better like free ebook versus 20% discount by now?

TRAVIS ZIGLER: That’s what we’re going to be figuring out.

DAVID ALADDIN: That’s what I’m figuring.

TRAVIS ZIGLER: I guess, so when you’re doing a landing page, you either want to, so most people are either trying to get to heaven or get out of hell. And getting people out of hell is a lot more of a selling proposition than getting people to heaven. And so, we’re getting people away from dry eye. And dry eye is a very painful condition or it can be so, what I found, or what we’ve seen is dry eye patients will pretty much do anything because they’re in that much pain, it’s pretty much debilitating, it’s affecting their whole life so, finding that hellacious pain point in your customer and kind of, I don’t want to say exploiting because that sounds negative but, figuring out how you can help them relieve that and you can find that in any area.

So if you have an audience, ask them. That’s all you’ve got to do. Make a survey, monkey survey that says, “What is your biggest pain point today?” Send it out to your audience, one question survey, you’ll get, you know, probably a 5% response rate and it will give you tons of information. Tons of information on where you can go with your advertising. That’s what we did for our latest Facebook ads. We just asked our audience five questions and they pretty much wrote the copy for the ads for us.

DAVID ALADDIN: I feel like you feel the same pressure that I feel with Facebook advertising, it’s like slowly creeping up and like everyone, there’s a lot of people just doing crazy good on it.

And, you’re like, I got to get on this thing too, or you know. And I’ve been learning and teaching myself Facebook Advertising. Thus, I feel like that’s an entire different business yet it’s, it could become a huge part of the business at the same time, for long years to come to.

TRAVIS ZIGLER: I mean Facebook is just so innovative, and if you’re a worldwide brand, like an education brand or something, you can really exploit Facebook Advertising just because 3 billion people are online right now and there are 7 billion people in the world and with Facebook and Google, actively trying to get more people on the internet. Africa’s going to be online, Asia’s going to be online, so there’s going to be 6 billion people online, probably by the year 2020. And just think about that Facebook has 2 billion users right now.

They’ll probably be going to double in size within the next 5 to 10 years. And so, Facebook Advertising, if you have an education platform, you can sell your education to anywhere in the world. And so, it’s going to be huge and I think if you learn it now, they’re always changing and I think if you stay one step ahead of everybody else’s, so, I think the big thing that’s coming up next, and that’s we are exploring right now is, automated chat box so…

DAVID ALADDIN: I’ve heard about that, yeah.

TRAVIS ZIGLER: Using Messenger as your email list and the basic messenger—

DAVID ALADDIN: Just makes me more overwhelmed. Yeah.

TRAVIS ZIGLER: So Facebook Messenger is pretty simple. I mean you can use like, I use ManyChat and it’s, M A N Y chat, and it’s an automated system where somebody puts in a keyword, they can get an automated message back and you can do blast to your Facebook Messenger instead of your email list. And email list you know a good response rate is 30% open you know, 2-3% click and ManyChat and or not ManyChat but Facebook Messenger has like 85 to 90% open rate and like a 40% click. And so—

DAVID ALADDIN: Wow.

TRAVIS ZIGLER: If you want to focus on one thing, stop focusing on email list, there is an area for email lists, I mean you should still focus on that but, if you want to exploit your business out focus on the things that’s coming next which is Messenger.

DAVID ALADDIN: How does… I don’t know if you’ve gone this far, but how does, how do you accumulate the Messenger leads? Is that from Facebook ads?

TRAVIS ZIGLER: So we, we are just starting that as well. So Messenger, we’ve got about 25 subscribers right now, just because we haven’t pushed it, but when you turn on many chat, it pretty much starts building every time somebody messages your company. It builds your active subscriber lists and so whenever somebody places an order on our website, there‘s a button that says, “Get all your notifications on Facebook Messenger,” it’s automatically highlighted and they have to turn it off so we just turn this on like we could go. And so we got 25 subscribers without trying in the first week and you can do advertising, you can actually do Facebook ads and go straight to Messenger. So somebody comments on a post that you made, it can automatically send them a Message from Facebook Messenger. And that gets them on the active subscriber list and they can opt out anytime.

DAVID ALADDIN: Wow! That is powerful, just a simple comment adds them potential on the list.

TRAVIS ZIGLER: Yeah, a comment, and you can automatically message them.

DAVID ALADDIN: It’s a golden nugget.

TRAVIS ZIGLER: It’s, I’ve had this moments when I’m doing things and you start doing it finally, you know how you have your list and you’re like I should be really be doing that, I really should be doing that. I feel like this is going to be one of those things like, why didn’t I started doing this 2 months ago when I first started noticing it? And this is going to be one of those things I think for me.

DAVID ALADDIN: And I just can’t imagine like those videos that go viral with like 3,000 comments, like how fast did those individuals are growing their lists.

TRAVIS ZIGLER: Yeah. Now that you mention…

DAVID ALADDIN: But by the way, problem is you don’t get their actual email. It’s kind of like a Facebook email?

TRAVIS ZIGLER: It seems like their—

DAVID ALADDIN: It’s still so smart!

TRAVIS ZIGLER: But it’s almost like you’re getting their phone number.

DAVID ALADDIN: Yeah.

TRAVIS ZIGLER: Because you can text message them now.

DAVID ALADDIN: Yeah! That’s true. The only, the reason why I said this, because if someone uninstalls Facebook—but I guess it could happen with email as well.

TRAVIS ZIGLER: As I told my friend this morning, I told them, don’t worry about the few and far between, worry about the, your customer.

DAVID ALADDIN: Yeah.

TRAVIS ZIGLER: If you lose a customer because they get out of Facebook, that’s fine.

DAVID ALADDIN: Yeah. Right.

TRAVIS ZIGLER: Don’t worry about that.

DAVID ALADDIN: What mistakes have you made along the way?

TRAVIS ZIGLER: This year has been a roller coaster ride.

DAVID ALADDIN: Great.

TRAVIS ZIGLER: And we expanded too quickly into more and more products without having systems in place. So, develop your systems first and then expand. Because what we did is just expanded and expanded, expanded; more products, more products, more products—but we didn’t have the systems in place so all we did is overwhelm ourselves and all our products died. And we lost focus on our main revenue streams, and in order to try get this other smaller revenue streams going where we just eliminated almost all of our revenue streams that weren’t that big and now we’re focusing just back on the main revenue streams again. And so big mistake there is not having systems in place when you’re trying to expand and we brought team members on board very quickly to help us with the expansion and weren’t just getting what we wanted out of them, and I think that’s partially our fault but partially their motivation fault because I just read last night a good stat: 2% of people don’t require supervision in order to do their work, the other 98% of the world does and so having those systems—

DAVID ALADDIN: I hate that quote.

TRAVIS ZIGLER: It’s terrible. But having those systems in place will help manage your teams so, systems first before you expanded into more products and more team members and so you don’t want to overwhelm everybody and so that’s what we’re focusing on now is developing systems. We’ve actually put our kind of revenue growth on hiatus until we can figure that out. Have a checks and balances system because we hired a new team member, he’d been with us for 6 months. He created Acopanco that went bad and we—

DAVID ALADDIN: Oh no.

TRAVIS ZIGLER: Ended up losing about $100,000 in one day. And so—

DAVID ALADDIN: What!?

TRAVIS ZIGLER: It was a net loss of 30,000 actual dollars but being out of stock and everything it ended up costing us about a $100,000 total after all’s been said and done. And so—

DAVID ALADDIN: I feel the pain.

TRAVIS ZIGLER: That was a 2 hour window. We actually, I know the sales were a little better than usual, not crazy!

DAVID ALADDIN: Yeah.

TRAVIS ZIGLER: One morning and we went doing a half marathon and we got back from the half marathon, we done a ton in sales and I was like, what happened? And we searched Acopanco that was on our listing on Google and leaked to a deal site that if you added this coupon to this coupon to this coupon to this coupon to this coupon, then you can get 3 of our products for $3, and these are our high end products that we usually sell for $50. And so people were getting—

DAVID ALADDIN: That’s exactly…

TRAVIS ZIGLER: It was awful!

DAVID ALADDIN: That’s exactly why I don’t run half marathons.

TRAVIS ZIGLER: I like that. That was good.

DAVID ALADDIN: No, I’ve done one before.

TRAVIS ZIGLER: It’s good.

DAVID ALADDIN: And our body was done and our mind was done after that.

TRAVIS ZIGLER: Well our body was done and our mind was done after that.

DAVID ALADDIN: That must have been misery-like. Because you can’t get out of bed and then—God! Your business like exploding.

TRAVIS ZIGLER: So then, another lesson learned this year is higher or great, don’t go cheap on professionals, if you’re going to hire for something, just don’t go cheap because we got, we’re in a big trademark suit right now, over our name and it’s with a big company, I mean a multibillion dollar company, and we have first use of the name and we trademarked part of it first, like when we trademarked for our logo, and we were getting our name trademarked and that’s when this whole thing came about.

And if we just hired the cheapest attorney, we probably wouldn’t have any say in this lawsuit, but we hired a great attorney and we actually, we’re about 6 months into the lawsuit right now, 5 months in we actually hired a separate attorney, the actual attorney that won the Apple versus Samsung lawsuit, and we hired her just to give us a second opinion, and it literally cost us a thousand dollars for her second opinion just to make sure we’re doing everything correctly. And so just don’t go cheap on professional services because you paid for what you get and you want the best out there. Don’t hire friends.

DAVID ALADDIN: Like this. Yeah.

TRAVIS ZIGLER: Everybody’s heard of this but I didn’t listen and it burned us a little bit and we lost a lot of money from that. And but you know you learn and you move on and we’re in a good place right now though and we, I mean we are moving forward, we learned a lot this year, it caused us a ton of money. We had planned to do five hundred thousand on prime day with all lightning deals and with our products.

DAVID ALADDIN: How much?

TRAVIS ZIGLER: Five hundred thousand and…

DAVID ALADDIN: Holy cow! Did that?

TRAVIS ZIGLER: We hit–what’s that?

DAVID ALADDIN: You do an average of a 180K per month, but then on prime day—

TRAVIS ZIGLER: Yeah.

DAVID ALADDIN: On prime dates it’s like you guys go all out, don’t you?

TRAVIS ZIGLER: We were going to and then due to the lack of systems and a lack of things going into place, the FDA held up about $90,000 of our inventory and it still held up actually, it’s three months later and prime date we did eleven thousand because we had to cancel everything because we were running out of stock and then due to our inventory being held up, we had to order more inventory to get it in so we didn’t run out of stocks so we then had no cash and we’re on the verge of like having no money at all. And…

DAVID ALADDIN: That’s the investor, right?

TRAVIS ZIGLER: We haven’t pulled in any investors in right now. We just actually got a new loan. And so the new loan helped us. We actually refinanced our Amazon lending loan because it’s twelve month term. We actually refinanced it to an SPA loan through the government and they turned that twelve month term loan into a ten year loan with lower interest rates and lower payments. And so that saved us.

DAVID ALADDIN: I’ve always—the first two years of this business I was struggling because I couldn’t figure out how to pay for inventory and grow at the same time and you mentioned like you’re going to do 500K—500 grand in one day. Yet you’re still struggling to provide the financing for the business and I think a lot of times people don’t understand how much capital goes, gets involved. You guys are going super ambitious, too!

TRAVIS ZIGLER: We tend to be a little more aggressive yeah.

DAVID ALADDIN: Yeah.

TRAVIS ZIGLER: And we learn from that lesson that we won’t be that aggressive anymore. And my wife even told me she can, she has her, “I told you so,” moment. She told us not to go that aggressive and so we actually pulled the reigns back a little bit. We’re going to go for more. And I said but if something goes wrong we’d be strapped severely for finances. And she goes how about you do half of it? And so I said, okay, let’s just go for half and something happened. And so she was right and yeah it saved the company probably.

DAVID ALADDIN: Wow.

TRAVIS ZIGLER: And to anybody that’s like listening as far as like inventory and everything, I always recommend that you should be keeping track of what your value of your inventory is every month. And you should leverage it at a hundred percent and so if you don’t have a loan that’s completely covering your inventory, you’re hurting your business by not being able to expand, by not being able to expand more in advertising, by not being able to bring on that key team member that will free you have to do more product creation or content creation, whatever you value in your business. And so we try to make sure we leverage our inventory at a hundred percent.

DAVID ALADDIN: That’s interesting. After I had like a serious disaster in some other areas, I actually try to keep a huge sum of money on the side for that rainy day. Because it was a big burn, you know, your heart was probably going crazy at that time.

TRAVIS ZIGLER: Soul is.

DAVID ALADDIN: Yeah. Man that is, those are a few mistakes and I feel like some of them aren’t even like in your control like with the employee and…

TRAVIS ZIGLER: Yeah.

DAVID ALADDIN: What happened with them? Is the employee still with you? Or…

TRAVIS ZIGLER: No, we actually let him and his team go. We actually hired him to take us over to Europe and with the European expansion we just pretty much wanted to be hands off and he was commissioned based and unfortunately, he had a day job too so this is on the side. And he said customer service and advertising is just too much. I need somebody for that. So we hired a service to help with customer service and advertising. And unfortunately what he did was he stopped watching Amazon completely and the service that we hired ended up making a ton of revenue in the month of May but spent twice as much as the revenue on advertising.

And so we ended up losing a ton of money in the month of May and we are already launching over in Europe so you’re losing money on the launches which isn’t a big deal but all of the sudden the cash had dried up for Europe and I was like, “What happened?’ and I do kind of let’s call it snap shot, I call it my snap shot. And I go through the numbers every month of Europe and the US just to get kind of a cash flow snap shot of how we did that month. And it was very off in the month of May and we fired the team and then my friend, we kept him on in June and we talked about what he can do to make it better and it ended up just we had to take it in a different direction and so we ended up letting him go in July and we’re still friends and we’re moving on.

His role in Eye Love which is our company name-Eye Love, he’s no longer part of that but we’re still kind of exploring other business ventures with him.

DAVID ALADDIN: Very cool. I find like those very specific issues like advertising, any area that touches like a huge amount of capital per month. I tended to do that myself mainly to avoid those kinds of issues. And I like your ambition where you’re trying to like source people to do those tasks for you. But you know as Aspen grows like 10K a month, 100K a month or whatever. I find it kind of scary to give that like those reigns over to somebody.

TRAVIS ZIGLER: But like…

DAVID ALADDIN: I’m impressed by like you know how you were able to give that kind of control over.

TRAVIS ZIGLER: Yeah, I mean it’s… you have to. I mean if you value that as a business owner, if you value taking over your ads, you’re going to grow so much which a Facebook advertiser or a CP, or cause… or a PPC… yeah, I can’t talk anymore. A PPC guy on Amazon, I think they’re worth anywhere from, it depends on how much they are working in your business but 20,000 to a full time guy at eighty thousand to a hundred thousand so…

DAVID ALADDIN: Yeah.

TRAVIS ZIGLER: If you value your time and at a hundred thousand dollar level then you can keep you in that stuff.

DAVID ALADDIN: Yeah.

TRAVIS ZIGLER: But you can also hire somebody and trust them that they’re the expert. They know what they’re doing and just have KPI’s in place to monitor them. If something goes wrong you can address it. Acos is…

DAVID ALADDIN: I got to do that. I feel like it’s easier said than done.

TRAVIS ZIGLER: ACOs is the perfect—It is. I mean it’s, we had somebody managing our PPC and Amazon ads for the last year and now with the automated software that’s come out, thanks to your podcast I got one of those and we actually let him go yesterday. And we’re now saving you know $30000 a year for him not being on our team because of Prestozon, which you had on the podcast like five episodes ago and they impress me enough that I went all in on their software and tried it out in the UK first. Loved it. So I brought it to the US and then got rid of our PPC guy so we can automate it.

DAVID ALADDIN: Power of software right there.

TRAVIS ZIGLER: Power of your podcast right there.

DAVID ALADDIN: Actually, you know I try I actually make an effort not to get commissions from any of the companies that come on mainly because it would create a conflict of interest. So I’m glad that you found that useful and I didn’t receive a commission. Just FYI.

TRAVIS ZIGLER: So I think what you should do is actually on the show notes is get in the affiliate link because if people are getting value from your podcast and you’re not asking for any kind of payment, I would be happy to go to your website to then click on your affiliate link because you introduce me to this company and then you’d get a ten percent structure for everything moving forward from them or whatever the structures.

DAVID ALADDIN: Right. You sound like a virtual assistant. Just to set up all the affiliate stuff.

TRAVIS ZIGLER: You can’t… I don’t think you can with your podcast. You can’t be afraid to ask for money.

DAVID ALADDIN: I know.

TRAVIS ZIGLER: And you’re providing so much value to your audience. Just my opinion.

DAVID ALADDIN: No it’s a good opinion. Something to think about.

TRAVIS ZIGLER: It’s always hard to ask for money but you’re not asking for anybody to do it specifically. You’re just saying that you know, Scott Voelker and the Amazing Seller Podcast, he always says you know you buy me a cup of coffee, click my affiliate link and he makes it fun.

DAVID ALADDIN: Yeah.

TRAVIS ZIGLER: And if I get value from his podcast and find a product that he uses, I will go through his affiliate link or like Pat Flynn on SPI and all those great podcast that are similar to yours but not exactly the same. And that’s what I think you should do. That’s just my opinion, you know.

DAVID ALADDIN: Yeah, got to get on it, right? Well, Travis, it’s been great to have you on the show. I appreciate all the golden nuggets that you provided. Any way for people to contact you?

TRAVIS ZIGLER: Yes, so follow us on Facebook. There’s a group of four of us. I’m probably doing the least amount in that group at around a 180,000 a month. And we just provide usual nuggets. It’s Business Igniters, and you should be able to find us there. We’re pretty small right now. We just do videos here and there. Also if you search on Facebook, that’s the easiest way to get a hold of me. It’s Dr. Travis Zigler. I have a public profile that we kind of post all our videos to. And then you can add me on your personal profile as well if you find me. Can I ask you a question?

DAVID ALADDIN: Sure. Just one tidbit though like I love how like—

TRAVIS ZIGLER: Good.

DAVID ALADDIN: There’s like, I’m probably the smallest at 180K per month. I’m sure like when you’re doing the business five years, you know the automation business for five years you never thought you’d be at that level of—

TRAVIS ZIGLER: Well, my one practice said, 220 thousand ends per share and now we’re doing that per month.

DAVID ALADDIN: Exactly.

TRAVIS ZIGLER: There’s a lot more expenses but the way we got to that was we surrounded ourselves with people that are doing better than us and we paid to be in those groups and then you’d become lifelong friends with the people in those groups, so the one Mastermind running is about 25,000 a year and it’s well worth it because our goal in two years for this whole Mastermind group is for 10 of us to get 10M a year and we’re all going to sell our businesses together. And you don’t have to sell the business if you want to which we don’t think we will, but if we all can get to 10M a year, 10 businesses and then we could sell it for 2.5 x multiple so each business would get 25M out of it so.

The only way you’re going to do that is with accountability and you see your friend getting higher better and better, and then you asked him what he’s doing and then you do it, and you repeat it.

DAVID ALADDIN: I agree. I like that addition. That’s awesome.

TRAVIS ZIGLER: So my one question?

DAVID ALADDIN: Go ahead.

TRAVIS ZIGLER: So what is your current business challenge? Or how can I help you in any way?

DAVID ALADDIN: My challenge is diversifying. I am fearful everyday of the amount of how much I’ve grown in Amazon in comparison to all the other channels and so I’ve been really pushing the wholesale channels; Walmart chat, eBay, and beyond. Japan, Dubai. So I’ve been working with wholesalers from all over the world. I actually haven’t talked about it that much but it is one of my biggest fears that Amazon would shut me out for whatever reason. And so that, having a significant amount of revenue in all my products stuck in FBA, that’s definitely one of my biggest fears because you’re kind of similar where I’m at, and so if they were to shut you down, you’d have a lot of inventory in FBA, most of your money and not a lot of revenue outside it. Not a lot of profit outside of that unless you’re saving up which I actually have been doing now because I have this fear and so that’s, I don’t know if you can help me there, but that’s my biggest fear and what I worry about.

TRAVIS ZIGLER: I mean I can give my two cents and then see if it go—so we’re 85% at Amazon US. That’s our revenue.

DAVID ALADDIN: Yeah.

TRAVIS ZIGLER: We’re at the 5% Amazon UK and then our 10% Amazon UK, and then 5% Shopify. And you know, I think you should look at those percentages. And yeah it’s scary and having insurance helps. And so getting that I forgot her name but she has Amazon suspension insurance and she pretty much guarantees that she can, she hasn’t guarantee it but she says she can get you back reinstated within 5 days or they start to pay you for your suspension in everyday that you’re suspended. So I always recommend that if you do have that fear is to make sure that you’re protected with an insurance plan and, because I mean everybody gets suspended here and there.

And it’s just a matter of when but Amazon I think is a lot better now with your account health in keeping tract with your account health. And just making sure that you stay on top of all that, that’s the key, and I think getting the insurance plan in place, it’s going to be about $2000-$3,000 a year, but it’s well worth your mindset. I mean you don’t have that scarcity mindset of fearing if it all goes away.

And then just working on, I’d say take a little bit of your advertising budget and lower it by 5% on Amazon to then increase it somewhere else, or if you had enough profit in your margins then budget, or take—so I have $10,000 profit. I’m going to take 25% of that each month to Facebook advertizing, or just some other advertising that you will never think off; Google, Bing, Yahoo, you’ll never know. You’ll never know where your audience is staying, you know.

DAVID ALADDIN: Just out of curiosity like, how does current insurance plan work? Does it…

TRAVIS ZIGLER: I am not sure but you should have Ron on your podcast. He should be here.

DAVID ALADDIN: Yes, Ron.

TRAVIS ZIGLER: She’s great.

DAVID ALADDIN: All right.

TRAVIS ZIGLER: We haven’t switched to her yet but we have our own individual plan with our carrier that we’re going to be switching to her soon.

DAVID ALADDIN: What’s her name again?

TRAVIS ZIGLER: I will find it and I will email it to you.

DAVID ALADDIN: Will put in the show with us. All right.

TRAVIS ZIGLER: Yeah. I forget her name.

DAVID ALADDIN: Thanks for coming on, Travis Zigler and David Aladdin.

TRAVIS ZIGLER: All right. Thanks!

DAVID ALADDIN: Out.

]]>Today I've got Dr. Travis Zigler, who graduated in 2010 from The Ohio State University College of Optometry with Magna Cum Laude honors. He is the co-founder of Eye Love, eyelovethesun.com, whose mission is to end preventable blindness. Dr.
Eye Love does an average of $180,000 per month on Amazon and Shopify. He has created highly engaged communities of over 2,000 people and growing daily.

In this episode you'll learn,

* How Travis started his business
* How Travis acquired businesses and leverages them together
* How he's built a business from passion
* How to build a brand leveraging SEO and content
* The people behind Eye Love and the charitable actions of the company
* The growth and decisions behind the company
* Strategic decisions and business operating
* Lots of golden nugets. Did I say lots!?

DAVID ALADDIN: Can you take us to the beginning before you guys were selling on Amazon and Shopify? Where did your journey begin?

TRAVIS ZIGLER: Now it began I mean back in college. I mean, we, my wife went to the University of Michigan, I went to the Ohio State University for under grad and we ended up meeting and started dating when she came to optometry school in 2007 and I was a second year she is a first year. We dated throughout Optometry school and started practicing in Columbus, Ohio from 2010 to 2015. And 2015, we worked for my uncle in Columbus, Ohio, and we decided we wanted to go off on our own and do our own things. So we actually pretty much quit our jobs, moved across the country to South Carolina and started two new practices from scratch and then with, whenever you’re staring up a new practice it tends to be a little slower at first while your gaining that initial clientele similar to your Amazon business.

You’re not selling two to three hundred units a day—you're selling one to two units a day and you're building up from there and practices the same way. And so I was bored and we found the amazing selling machine was on its fifth version in May 2015 and we bought it and just went through the course and didn’t follow the training for picking out a product. Just did what we know and what we loved which is eyes, and just going to went from there. So May or July 2015 in when we got our first sale and we did the typical rookie mistake of only ordering a hundred units, selling out in seven days and realizing, wow, this is real. So then we brought in an investor and we dump about twenty thousand of our own dollars in and grew from there.

DAVID ALADDIN: Okay. So like before the whole Amazon thing, you guys joined the practice for five years. When did you get the, you had this concept of just like living you k...]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean1:04:10AS 91: Expanding at 60 Million in combined sales with Jamiehttps://amzsecrets.com/91-expanding-60-million-combined-sales-jamie/
Mon, 21 Aug 2017 17:30:29 +0000http://amzsecrets.com/?p=6589https://amzsecrets.com/91-expanding-60-million-combined-sales-jamie/#respondhttps://amzsecrets.com/91-expanding-60-million-combined-sales-jamie/feed/0Today I’ve got Jamie Davison on on the show, Jamie and his co-founders Jason and Brad combine to sell over $60 million per year on Amazon. He is the co-founder of AMZ Insiders, a coaching program focused on helping new sellers create their own successful Amazon business and provide insights and tips to existing sellers.
Selling on Amazon
How to build an Amazon business
How Jamie and his partners business scaled very fast
Jamies path to getting where is today
How he quit his job and why
Amazon strategies and secrets
How to scale an Amazon business
How to grow an e-commerce business
How they are divvying tasks and diversifying
Important networking tips
How they plan to double their business
And much more
Free Video Training: www.AMZInsiders.com
Blog: www.AMZInsiders.net
Free Facebook Group: Amazon Insiders – FBA Sellers https://www.facebook.com/groups/AMZInsiders/
Email: Jamie.Davidson@AMZInsiders.com
DAVID ALADDIN: Great to have you on the show, Jamie.
JAMIE DAVIDSON: Hey, thanks David. Great to be on and I appreciate you having me on.
DAVID ALADDIN: Yeah. So can you take us to the beginning, before selling on Amazon? Where did your journey begin?
JAMIE DAVIDSON: Sure, yeah. My journey I guess, everyone has a different path, of course. On my end, I was, way back when actually a military officer, had attended WestPoint and so. In my 20s was kind of had the military background eventually jumped into the corporate word and probably like a lot of people’s careers kind of worked up the corporate ladder the best I could so I had a—I was in banking early on, I’d been recruited over to Home Depot, so I had some retail experience there for a few years running a Home Depot store and then, I kind of fell into the education space with a big test preparation company, Kaplan.
DAVID ALADDIN: Oh, yeah.
JAMIE DAVIDSON: Yeah, yeah. And so then which great education minds and could use some help on the business side so I kind of found that space and stayed in there for a good while. Had some success there and again, worked my way up through just kind of a Senior Executive there and then was part of some private equity deals. We brought in as a Chief Operating Officer and a CEO of another company where essentially, these private equity companies are buying the company. Basically about 50 million dollar businesses or so and they hope to flip them in about four to five years. So I was kind of the hired gun through that approach, so, yeah. So I was kind of—I felt like I had this big title but at the end of the day I was a hired employee, just a senior employee to help kind of lead businesses in these spaces here.
DAVID ALADDIN: I feel like when people amass so much money, they just create so much more money. I mean, 50 million, equity deals, and then they’re trying to flip it to 200? It’s pretty insane.
JAMIE DAVIDSON: Yeah, exactly. Exactly. They’re trying just to take it across the river and in four or five years, probably at least sell it for double, if not more.
DAVID ALADDIN: So, how long was this before you got into Amazon? What year, you think?
JAMIE DAVIDSON: Yeah. So I was in 2000, I mean, kind of the education run I think with Kaplan and a couple of these other companies was 2000’s, early 2000’s, up through 2013.
DAVID ALADDIN: Okay.
JAMIE DAVIDSON: And actually even through the last couple of years. Yeah, so for a while, I came down to—I’m in Atlanta here but I came down to Atlanta in 2011 and that’s where the kind of introduction to Amazon begun so to speak, yeah.
DAVID ALADDIN: Nice. You’d say like 2015?
JAMIE DAVIDSON: Yeah, I mean, actually I had full-time jobs up until this past year.
DAVID ALADDIN: That’s awesome.
JAMIE DAVIDSON: But my co-founder Jason, he jumped in 2011 is what I’m sure we’ll talk some more about that but so I kind of was following that path while he was in it full-time,Today I’ve got Jamie Davison on on the show, Jamie and his co-founders Jason and Brad combine to sell over $60 million per year on Amazon. He is the co-founder of AMZ Insiders, a coaching program focused on helping new sellers create their own successful Amazon business and provide insights and tips to existing sellers.

JAMIE DAVIDSON: Hey, thanks David. Great to be on and I appreciate you having me on.

DAVID ALADDIN: Yeah. So can you take us to the beginning, before selling on Amazon? Where did your journey begin?

JAMIE DAVIDSON: Sure, yeah. My journey I guess, everyone has a different path, of course. On my end, I was, way back when actually a military officer, had attended WestPoint and so. In my 20s was kind of had the military background eventually jumped into the corporate word and probably like a lot of people’s careers kind of worked up the corporate ladder the best I could so I had a—I was in banking early on, I’d been recruited over to Home Depot, so I had some retail experience there for a few years running a Home Depot store and then, I kind of fell into the education space with a big test preparation company, Kaplan.

DAVID ALADDIN: Oh, yeah.

JAMIE DAVIDSON: Yeah, yeah. And so then which great education minds and could use some help on the business side so I kind of found that space and stayed in there for a good while. Had some success there and again, worked my way up through just kind of a Senior Executive there and then was part of some private equity deals. We brought in as a Chief Operating Officer and a CEO of another company where essentially, these private equity companies are buying the company. Basically about 50 million dollar businesses or so and they hope to flip them in about four to five years. So I was kind of the hired gun through that approach, so, yeah. So I was kind of—I felt like I had this big title but at the end of the day I was a hired employee, just a senior employee to help kind of lead businesses in these spaces here.

DAVID ALADDIN: I feel like when people amass so much money, they just create so much more money. I mean, 50 million, equity deals, and then they’re trying to flip it to 200? It’s pretty insane.

JAMIE DAVIDSON: Yeah, exactly. Exactly. They’re trying just to take it across the river and in four or five years, probably at least sell it for double, if not more.

DAVID ALADDIN: So, how long was this before you got into Amazon? What year, you think?

JAMIE DAVIDSON: Yeah. So I was in 2000, I mean, kind of the education run I think with Kaplan and a couple of these other companies was 2000’s, early 2000’s, up through 2013.

DAVID ALADDIN: Okay.

JAMIE DAVIDSON: And actually even through the last couple of years. Yeah, so for a while, I came down to—I’m in Atlanta here but I came down to Atlanta in 2011 and that’s where the kind of introduction to Amazon begun so to speak, yeah.

DAVID ALADDIN: Nice. You’d say like 2015?

JAMIE DAVIDSON: Yeah, I mean, actually I had full-time jobs up until this past year.

DAVID ALADDIN: That’s awesome.

JAMIE DAVIDSON: But my co-founder Jason, he jumped in 2011 is what I’m sure we’ll talk some more about that but so I kind of was following that path while he was in it full-time, I was still kind of on these…as you’d say I have these awesome big titles which he seemed to be impressed with but I was much more impressed what he was doing actually in eCommerce and Amazon versus what I was doing.

JAMIE DAVIDSON: Yeah. I mean Jason is a native Chinese. He’s been in the country for a long time, for about 20 years and he was a software consultant for companies like Coca-Cola and other major brands helping them with software and also kind of their back-end but I moved to Atlanta at 2011 to be the Chief Operating Officer of this tutoring company and he was literally my next door neighbor, a few feet apart from each other. At that point, he was selling cellphone accessories out of his garage at that point. So at that point, I really didn’t think too much of it.

It was—I have three sons and he has a daughter. My boys would come back over and they’d come back with an IPhone case and that kind of stuff and we’d…I’d say, “Hey where’d you get that?” and overtime it was like, “Oh, this is…” Yeah, I kind of learned this is what it does. Even then, we’d hang out a lot but it’s not like when you’re friends or neighbors, you’re not like diving into each others’ business so much in terms of what they’re doing. In some ways you’re trying to… you kind of get a feel for it but that was the beginning of it and because I think in 2011, it was still just a part-time thing for them and then in 2012 was when Jason quit his job and went all in. Well, again, I was still working through all this time but that’s when, that’s where he begun. I was kind of following the journey or kind of behind the scenes, helping sometimes, talking strategy and that kind of stuff but I was still working my full-time job.

DAVID ALADDIN: Interesting. I wish my neighbours were like huge entrepreneurs. I hope they’re not watching this but, man. They’re not like your type of neighbors.

JAMIE DAVIDSON: No, I mean, it was funny because he’s a very humble guy so usually what happened was in the house is a real nice neighborhood and everything, but the houses are really close and I would hear him out in his back deck and I’d stay up late working for my work but he was always out in his back deck speaking Mandarin or Chinese at one in the morning. And at the time, well I thought, oh, that’s interesting. That’s what he does. And I kind of thought that the reason he could do that was because he spoke Mandarin, and I thought that was like a barrier for me.

So at first, even though I was aware of how even early on, how well it was going. At first, at that point in time, I really thought that I didn’t fully recognize. Kind of what I recognized later that it’s an advantage to speak Mandarin, but it’s certainly not as I know you’re aware. It’s not a complete barrier but early on that’s what I thought so I kind of followed him along but I wasn’t thinking from day one. My wife was like, why don’t you jump in to that or at that time I was kind of looking at it like oh, that’s an interesting side gig, but as you know as I got more involved the further I realized the potential but earlier on I did not. I just kind of thought like, oh, it’s a side small little thing and it’s kind of funny, selling on Amazon, what is that?

DAVID ALADDIN: Sounds like, yeah.

JAMIE DAVIDSON: Yeah.

DAVID ALADDIN: It’s surprising. You know how the saying goes, you’re the closest five people that you hang out with but you took it to the most literal sense with your neighbor.

JAMIE DAVIDSON: Yeah. I mean so as we get further into it. Jason, still has a house in that neighbourhood but he’s back in just last year to really grow the business and what we’re doing. He’s over in Shenzhen in China for most of the year and I have a team here but back then, literally, it was kind of humorous. I’d go over, bring over some ice and I’d joke about teaching how to drink a rum and coke or we’d have a glass of wine late into the night and everything but we were just talking and he’d share kind of war stories as this stuff was going on but it really wasn’t intentional. A few times he would joke, oh, I should hire you as a CEO but I probably couldn’t afford you. And I was thinking, yeah, this is kind of a small retail business and right, I’ve got a family and a good paying job, so it wasn’t really my mindset at that point but I guess I’m a slow learner from that perspective, eventually, I got pretty excited about it.

DAVID ALADDIN: What do you think pushed you passed the edge like where you’re like, okay, I want to get into this as well?

JAMIE DAVIDSON: Yeah, no, it’s funny and sometimes we’ll have Jason, he can join from China for example, but, get his perspective, too. But Jason for years would tell me and it wasn’t even just necessarily about Amazon, just as entrepreneurs, like you should totally do this, you should get into it. So we talked on his end too whether you want to do an education deal with me knowing my background on kind of for profit education. So, and I consider myself a risk taker but also I’m in my 40’s so with a family and everything else so it was hard because of the barrier on my case in terms of the corporate jobs and the pay was pretty high, so for me to kind of make that leap took, you know how to kind of be the right circumstance and the right situation, and even my wife thought it’d be a little bit crazy.

Unless you really—because at the end of the day it’s still entrepreneurship and you got to produce but for me, it just took a while to be honest for me to get to that point but the more I really got into eCommerce and started looking at it. For me it was also just a fit. It was something I’m kind of an analytical guy in a background and the more I saw it with Amazon and Jason would share this with me that early days, just around the tools and the reporting available, and all those stuff, you don’t have to build that. A lot of times, in other companies you have to build. The more I…I just thought it was fun looking at the information and it was just a goo fit for me. So in my case it was, you had to take a leap at some point but also, I thought it was the right opportunity.

DAVID ALADDIN: Did you take the full leap or are you still doing some part-time work on the side?

JAMIE DAVIDSON: Yeah, I took the full-leap.

DAVID ALADDIN: Awesome!

JAMIE DAVIDSON: Just this past year. The past year’s so…

DAVID ALADDIN: It’s good for you then.

JAMIE DAVIDSON: Yeah, so then again, it’s like…

DAVID ALADDIN: Scary at first.

JAMIE DAVIDSON: Yeah, exactly. You know, I mean it feels good and it’s scary and a lot of people think it’s awesome and so cool. I’m like, yeah, but it’s… again, it’s a good thing. You go to bed every night waking up going, I’ve got to do these 100 things because you kind of eat what you kill as an entrepreneur so to speak. Which is good but I think it definitely has like I said it’s a lot of work as…

DAVID ALADDIN: People, yeah, a lot of my friends think it’s easy. Like, oh, you just stay at home and do whatever you do.

JAMIE DAVIDSON: Yeah.

DAVID ALADDIN: But it’s not, it’s not easy at all, you know. I feel like there’s this constant stress always that if you’re not making money, you’re losing money and if you do that for a long enough time, you’re going to be broke technically.

JAMIE DAVIDSON: Yeah, you got a great perspective. I also joke with people that I’m in Atlanta here and I made part of Atlanta’s CEO council from my education roles and so I’ve been to a lot of these networking things in the past and in that space, when I mention what I do, people, people were polite but no one really cared because it’s not really that interesting even though it’s a huge industry of itself but the eCommerce space is like a lot of people are interested. It’s just it crosses over so many things so in that part I found interesting that whether it’s old high school friends or people I know here, people are definitely curious about what you’re going but at the same time they think, they say like, wow, that’s incredible luck or incredible this, but it’s exactly what you just said, it’s like, well, it looks good or sounds good but at the end of the day, it’s you know, you’ve got to grind and put in the work and make things happen.

DAVID ALADDIN: Yeah.

JAMIE DAVIDSON: And every day’s a new day.

DAVID ALADDIN: So, it took basically you guys seven years from a garage and then I saw a video with you guys in this huge warehouse, so.

JAMIE DAVIDSON: You know, with the racking and everything, so it’s like your typical warehouse with a loading dock.

DAVID ALADDIN: Do you guys own that or rent it?

JAMIE DAVIDSON: Yeah, we rent it. We’ve had a few locations we had to grow to this size and we’ll see in a year or two, we may have to switch again but yeah, we’ve got a lot of inventory here. I mean, even though we sell on Amazon FBA. And have our items at Amazon and other market; we also sell in a lot of other market places. And the other part is we have a lot of business at Amazon through Vendor Central so we just have really quick turn-around times. We have to get inventory turned over to whether it’s a customer or to Amazon so we have to stage a lot of it here versus sending it from China by boat, all that kind of stuff.

JAMIE DAVIDSON: Yeah, so originally, Jason’s approach was pure FBA, selling on Amazon. He did actually go to some other like Best Buy back in the day or Home Depot even before, some of the Vendor Central stuff, but, so one of the things because of the size of the business that you do get a little more interaction with Amazon directly and so the team’s always been invited up there a couple of times a year. We went up just two weeks ago, I was up there. You meet with them, and see how people there on Amazon’s side, they want to, just like any company kind of with their account execs, they’re looking at their bigger clients and saying, you know, and try to recommend or guide what they think you should do.

So a few years back, someone at Amazon in a meeting with Jason had that—Jason was really hesitant to do it because of concerns around the margins and less control over the product and everything. But someone at Amazon advised, basically got up and said that we’re leaving millions of dollars on the table by not doing Vendor Central and when you’re at Amazon, it’s almost kind of funny. You talk to people on both sides of the business. At Amazon there’s like a firewall between the Vendor’s Central side and the traditional Amazon.com side and so, basically the idea there now, too is we do almost half the business through Vendor Central.

These days so on that side of the thing, if you can establish the brand well and you can also…you have to have good logistics in terms of being able to provide the product when they need it because essentially they’re on control at that end. So if you don’t have the product for it, they’re not going to focus on you, they’ll focus on someone else. But if you can do those things, you can get the set-up going then it’s like you just provide them an inventory and then they do the rest and sell it so it can be pretty good but it’s you got to kind of find the right stage I think to do that because like I said, you got to have some of the logistics in place to be able to provide them because you know, you’re at their beck and call in terms of when they need the inventory and so forth.

DAVID ALADDIN: So, do you think like the biggest issue is just providing and having the inventory available for Vendor Central because with Seller Central it’s like—

JAMIE DAVIDSON: Yeah. Yeah.

DAVID ALADDIN: You’ve got all this worry about the little details with the customers and whatnot?

JAMIE DAVIDSON: Yeah! No… exactly right. There’s more to deal with in terms of the—on the Seller Central side. In terms of everything and if you’re whether FBA, if you’re not selling FBA, then we have customer service teams to support just because the scale, we actually have to have our own customer service team and everything but from a Vendor Central side, again, the inventory is big so if you’re your typical FBA seller on the smaller side who’s periodically shipping stuff over from China and either sending them directly to Amazon or directly to kind of a staging area, that’s going to be more difficult in a Vendor Central environment, right? Because they may say, on a whim they say, hey, we’re going to do this special promotion.

We need a bunch of your stuff immediately or we need it in a few weeks. And so it’s more of a traditional dynamic that if you were like a manufacturer of a product and you’re working with let’s say, Home Depot, right? You got to be able to kind of stay in the flow because again, there are a lot of other partners that you’re working with and so if you’re going to really kind of be at scale there and make that work, again you got to have the product. So I mean, I think that’s definitely the biggest dynamic. So in this case, where we have this warehouse here and all the stuff, we can make that work. Otherwise, you’re also paying a lot to fly product in and depending on the size and weight of your product, you know that’s going to be a possible hindrance.

DAVID ALADDIN: For sure.

JAMIE DAVIDSON: Yeah, in our case our product’s a little smaller so we can fly stuff, product around more often but again, for a lot of products it’s not. You don’t want to overspend on your logistics.

DAVID ALADDIN: Do you guys find that having your own fulfillment or your own warehouse versus a third party fulfillment center, what was the difference in there?

JAMIE DAVIDSON: Yeah. That makes a good question. I think if it may also have just been the timing of it at that point where it started off small, like this is our, this…

DAVID ALADDIN: I mean, I’m in that same—

JAMIE DAVIDSON: It’s—yeah.

DAVID ALADDIN: I’m in those same shoes where I’m trying to decide which way to go.

JAMIE DAVIDSON: Yeah, I mean, I think generally, it’s not the path we have right here. Generally I would, the first thing I would naturally think of is how can you outsource and not have to do that because when you do, it also depends kind of what your skill set is and your labor teams, and if you’re going to add management team because we have a warehouse here with right now, I’m on my computer screen. If I have to put on the laptop and walk you in there, there’s probably 10 employees out there working right now. I mean, it’s basically a warehouse team, right? And they’re slugging away and so you got to have a Warehouse Manager and so we have to have that. We have a head of HR and accounting here so it’s a little bit more of a traditional—

DAVID ALADDIN: Yeah.

JAMIE DAVIDSON: Operation, right? Because I mean, they’re employees, you got to make sure you take care of them and the conditions have to be right. So to do that is a bit of a commitment. I think in our case it was the business accelerated really fast early on. It got to 10 million and 20 million pretty quick. The first couple of years that we just kind of… we made that leap early on. If I was building it separately, again, like today, and Jason would also say, hey, there was a lot of good work being done. We also, in terms of market time and things that were in favor but if we’re doing it again, started from scratch, I’m not sure if we would build our own warehouse until we got—unless we really had the sales initially.

DAVID ALADDIN: I think the warehouse side is like a whole another strategic component of the business so I find it very interesting for your people to actually manage and own the warehouse’s component of it.

JAMIE DAVIDSON: Yeah, and actually again, you probably have a better perspective of who does what in terms of the different approaches out there, people will talk to you, so I don’t…I’m not sure how common people go with this approach first but it is like I said, you got to, it’s more like a traditional operation because we got forklifts flying around here.

DAVID ALADDIN: Yeah.

JAMIE DAVIDSON: And we got regulations and ordinances and safety, and all that important things

DAVID ALADDIN: What do you think are like some of the biggest business mistakes that you guys made so far?

JAMIE DAVIDSON: I think there are a couple of things; we’ve had Amazon accounts shut down so that’s certainly have happened before. We’ve been shut down during a key period of time, right during Black Friday for a few weeks. During the time when business was selling really well. There’s… one of the ones too is just around trademarks and brands too, so not with the core brands but a mistake of not really making sure that your brand is good to go before you sell it. We’ve had–been shut down not because, not intentional but just kind of being sloppy at times with in our case, we modified a brand name.

DAVID ALADDIN: Yeah.

JAMIE DAVIDSON: And didn’t realize someone else was selling under that name. And so, a lot of people even through the training will ask me like, they’ll spend all this time in picking the brand name which I’m like it really doesn’t. You can come up with a really bad brand name and it still doesn’t matter but if you’re not really careful upfront, it can cost you a lot and so, something in this business, especially if you get big and successful to some extent, if you have a patent violation, what’s going to happen, typically is there not going to go after you when you’re small, they’ll wait till you… they’ll see how much money you make in a product, in a category and once you make the money, then they’re going to come back so you start getting into, it’s certainly beyond 10 million and so forth, you’re going to get into more legal side of things and so forth.

But certainly on, the basics would be on the trademark side. It’s being sloppy there at times. And the patent’s measured, it’s a mistake always but it’s just the reality of it that we have to spend money on some legal battles and that type of stuff which is just part of the business as you become bigger because people are going to want to… they’re going to want to, especially if you’re successful, they’re going to want to take a cut of that and they give you something… really, I mean, the patents are going to be something really, really minute and small, and again, depending on your product, that can get along.

If you’re smart, they’re probably not going to come up as much but yeah, no, a lot of the frontend things, I think certainly product side, too. I think the product selection, again, I know these are I want deals with this but you do have to do your homework in terms of not every product works or there’s not every product that you’re going to be good at. There are certain things that we’re good at. We’ve got into some products that have not worked and have failed because every niche is different and kind of how you add value is different, so.

DAVID ALADDIN: For sure.

JAMIE DAVIDSON: It’s not like we can just take anything and just replicate it and it’s like printing money for us, we’ve got to stay within our lanes still and then we’re trying to expand into new markets but—

DAVID ALADDIN: Yeah.

JAMIE DAVIDSON: We’ve got to be careful just like anyone else.

DAVID ALADDIN: I want to go deeper into the account shutdowns. Mainly because it’s my biggest fear with Amazon. The bigger I get, the more I fear it. It’s like a bad trend I have. It’s like a house of cards. The taller you build it, the greater the collapse. What happened and how’d you guys deal with it?

JAMIE DAVISON: Yeah, so a couple of the ones again there was the early days where it’s more like I was just at Jason’s house and having drinks with him and hearing their early days stories and then there’s today, I’m not going but I’m pretty familiar with it kind of from both ends of more of initially, it was…I kind of use the analogy sometimes of speeding. Speeding versus committing murder as a crime that they’re both technically against the law but one is more grievous than the other.

DAVID ALADDIN: Yeah.

JAMIE DAVIDSON: So there are a lot of things in Amazon that’s kind of speeding, right?

DAVID ALADDIN: Right.

JAMIE DAVIDSON: It’s kind of a grey area and you don’t really exactly know how far you can go. But if you think in one hand, like, hey, we’ve gotten pretty big and we interact with Amazon a lot, that we could still get shut down even though they know us and at Amazon, there’s account executives that look over every category in every account so you know what the products you sell, there are people that are looking specifically at your account and you’re just in a mix depending on how big you are or small but you fall under someone’s purview. In Amazon, there’s a lot of turnover too so they have people constantly coming and going.

DAVID ALADDIN: Yes.

JAMIE DAVIDSON: So it’s, which can create some challenges but certainly and again, things will rest around reviews of course, could get someone shut down. There’s manipulation around of how you’re ranking for your products. You could get shut down and again, there’s different levels of specification, kind of black cat stuff, I’m sure you’ve had discussions with people on this call and everything else but it’s interesting, it’s not something that, sometimes you read kind of horror stories you can just type on, look it up on Amazon, and these stories, like someone got shut down and it was final but it’s not really our experience really. There is a step, there’s a multi-step process in terms of appealing. I don’t know, I don’t consider myself an expert. There’s attorneys out there and everything else.

DAVID ALADDIN: There is huge industry, yeah.

JAMIE DAVIDSON: Yeah. They’re really good at it but typically there’s an action plan that you got to put in place and say, hey, if you just submit like, hey, why is my account shut down? Can you turn it back on? Or something, you’re not going to get a lot of progress. But with again, some of these attorneys, people out there, there’s usually a format of, hey, here’s our—we acknowledged this happened, or this was, we didn’t intend for this to happen and here’s our game plan going forward to make sure this does not happen again. A lot of it, sometimes, the shut downs are going to be flagged by automated tools and so they sound more harsh than they are but we’ve always been able to get our accounts back open and again, unless you’re really, really trying—

DAVID ALADDIN: Following—

JAMIE DAVIDSON: To do something wrong.

DAVID ALADDIN: How long were you guys down for? Do you remember? Or…

JAMIE DAVIDSON: We were down for about three weeks.

DAVID ALADDIN: Oh, yeah, that’s painful.

JAMIE DAVIDSON: I mean, we were just shut down in Canada just like two months ago so we’re in… we have a set of product line that we’re focused on but then we’re pretty global in terms of the different countries.

DAVID ALADDIN: Yeah.

JAMIE DAVIDSON: So you know, in Canada, and Mexico, and UK, and now we’re in India, we’re just starting off in India. But anyways, in Canada, I was in Seattle meeting with the Category Manager for us from Canada.

DAVID ALADDIN: Awesome.

JAMIE DAVIDSON: Yeah, and he didn’t really know us before, too, but now he knows us and probably next time as you get bigger you can get some relationships, they’ll probably be able to reach out to you but it can just be different mistakes you’re making that if they don’t like it, you can get shut down. But again, it wasn’t… it was more of annoyance because it causes business while we shut down. It’s not like there’s a fear that, hey, we’re going to be kicked off of Amazon so to speak, so yeah. I mean, but generally again even with new people and so forth, again, I guess that’s technically always a possibility but it’s not. I mean, a meeting with Amazon and everything else, it’s not like they’re out there to find people to shut down and they’re looking to…

DAVID ALADDIN: They want us, they’re going to kill us.

JAMIE DAVIDSON: Yeah, no!

DAVID ALADDIN: This episode of AmzSecrets is brought to you buy our Amazon Seller tools, AmzSecrets.com, VIP, Super Charges, your Amazon listings. It uses big data from Amazon and Google in a meaningful way to increase the traffic through Amazon listings. I use them with my brand and I am personally ranked in the top five of some major Amazon categories. It’s not a golden bullet as you need marketing and good brand strategy but having the ultimate Amazon listings goes a long way. To learn more about it, go to AmzSecrets.com.

JAMIE DAVIDSON: I mean most of the employees there is pretty cool. I mean, they really tend to be sharp, obviously really sharp people.

DAVID ALADDIN: Yeah.

JAMIE DAVIDSON: Those are from really good backgrounds and from Ivy League schools and all those stuff.

DAVID ALADDIN: Yeah.

JAMIE DAVIDSON: But most of them kind of, they do admire what we’re doing because they, they’re in these corporate jobs and they think, wow, it’s really cool. They kind of hope someday to be able to launch their own business, everything else, and they have their work cut out for them but they’re not, at least I haven’t come across—they’re trying to beat Walmart and beat their competitors, right? So they want to be the best platform.

DAVID ALADDIN: They’re beating Walmart for now.

JAMIE DAVIDSON: Yeah, definitely Walmart.com.

DAVID ALADDIN: Yeah.

JAMIE DAVIDSON: But they’re very focused on the competition so it’s not like they’re, the perception is they’re kind of working against us but when you meet with them, it’s not the perception I get along.

DAVID ALADDIN: What velocity or let’s say monetary volume were you guys at when you finally started to get account executives and such?

JAMIE DAVIDSON: Yeah, so it’s probably when we got to about the 10 million dollar mark.

DAVID ALADDIN: Okay, so I got to get there.

JAMIE DAVIDSON: Yeah. There’s still ways, David, you can…

DAVID ALADDIN: I get the global ones but like the global executives but I know they’re kind of like the fake ones, I want the US one.

JAMIE DAVIDSON: There’s still ways you can get kind of your foot in the door to get up to get a meeting with them and there was someone like, they don’t do a lot of events but they did like a boost event last year. I was out of town and when I was up in Seattle, they had sent us an invite to this event in New York.

DAVID ALADDIN: yeah. I saw that, yeah.

JAMIE DAVIDSON: I didn’t really think it was even Amazon at first.

DAVID ALADDIN: No.

JAMIE DAVIDSON: I was like, this probably someone like us doing a training or whatever.

DAVID ALADDIN: I thought it was fake.

JAMIE DAVIDSON: Yeah, yeah. So I met the girl who runs that, she was like, no, it’s real, you should come. You definitely got to come. I was like, yeah. It’s like an invite only, right? So I was like, oh, yeah, next year. So on one hand they’re pretty protective. When you’re up there, they’re like, they’ve got to escort you around and they’re cautious of what they say and don’t say with you but they want to find a way to connect with sellers and help seller communities, it’s just…

DAVID ALADDIN: Corporate.

JAMIE DAVIDSON: Yeah, yeah. They’re trying to think and they’re like, yeah, I think I could tell you. Yeah, this was in a press release so I can definitely tell you this. They don’t want to give you an unfair inside edge.

DAVID ALADDIN: Yeah.

JAMIE DAVIDSON: Violate their own rules but at the same time, they want to… so some of these things they said, hey, like the one gal I meet with who ran this boost event she said, oh yeah, we’re going to—they want to have more trainings and have their, they want to have some control over the training going out there and do more so they were talking about with coming out with some pilot for that stuff—

DAVID ALADDIN: Very cool.

JAMIE DAVIDSON: And so I said, oh, yeah, I’d love to help or you know be part of that. And so, yeah there are ways to connect with them and eventually probably get into you know, you get a direct wrap in that kind of stuff.

DAVID ALADDIN: Hm. I saw a vid—go ahead.

JAMIE DAVIDSON: It’s may also differ by markets. Sorry, it may differ by markets, like Canada, you may be able to kind of achieve that quicker, get help quicker in a smaller market place where less people are focused on and there’s just so many different angles within Amazon and things that’s working on that but yeah, sorry, I interrupted you there.

DAVID ALADDIN: No, no. You’re my guest. So I saw a video with you discussing some of the myths that Amazon sellers have about Amazon. I actually liked it a lot. Can you go into detail about what kind of myths they are?

JAMIE DAVIDSON: Yeah, I think some of the stuff, we were kind of just talking about a little bit which was one of them again was this perception that Amazon is looking to shut you down or to work against you, or that they have kind of, it almost feels like a negative connotation at times verse sellers and again, I consider that one of the myths because that was, when you go to meet them, they’re in these silos where they have these big jobs and I can relate to it from my own corporate jobs. Like when I was like in the exact same thing so but it was just a different type of space where they have all this responsibility but they’re only in one silo of the business.

So if they’re on Vendor Central or this, within these things, they don’t know. They don’t know a lot of things. Each individual doesn’t have kind of the whole picture. Like as a seller, you know more about the platform than they do.

And they’ll say that because for example I have a friend of mine who heads up Amazon Prime Day. He’s another former military guy. He’s a former aviator pilot, but so he is super focused all day long year on just to the Amazon Prime Day and he’s trying to learn all the other aspects you know. So he’s… he doesn’t know how to, he doesn’t know everything about it because he’s so focused on how to execute a really big day and they’re really good at that, but how it relates to things that I’m talking about or focused on.

He doesn’t know but so again, that was that one comment you had before that they are trying to work with us and understand it doesn’t always feel like it that when you’re away from Amazon because it feels harsh and threatening and so forth. And in some hand, they do need to have I guess in my opinion, some fear factor because they want to, they want people to try to play within the rules and have some…

DAVID ALADDIN: It’s working.

JAMIE DAVIDSON: Probably. It’s like the IRS with your taxes, some level of fear that’s, enough of that. Oo, that was probably honestly the biggest one going up there and the other one too is again around things like training programs and things they have on. They don’t do a really great job of selling themselves in that way of kind of letting you know what they’re trying to do and so again, I think there’s ways to see more from them and connect more with them to help FBA sellers and so forth. So those are probably the biggest ones that stuck out to me being up there but it’s just a really impressive… you know they have to compete with Google in terms of employees, like our Google less type companies I compare it to. So they’ve got, everything’s super nice there, everyone’s like tons of people are walking in with their dogs.

DAVID ALADDIN: What?

JAMIE DAVIDSON: They got doggy snacks in the front counter to take in for your dogs. I haven’t worked in that type of corporate environment so that was kind of humorous for me but I did ask them when I was there, I asked them at dinner, I said, what’s the culture like to work here? It wasn’t so much a direct question for me as a seller but I was just curious. In one hand in Amazon, I hear about Jeff Bezos and the intensity of that, about how intense the environment can be and so it sounded like they have a healthy balance that they have all this autonomy like there not, no one really watches what hours they work but they’ve got to get their work done and they do work pretty long hours and everything but it’s just kind of a little bit different type of corporate environment than I’ve worked at in the past, so.

But you know, my biggest thing was I came away feeling like beyond the big… we have our big operation, we have contacts, but I do feel like for mid-sized sellers and smaller sellers, you can find ways to connect with Amazon. It could be, you know you don’t want it, it could be a way like the Boost Event or if they’re going to run a pilot in trainings or try to find ways just like anything else to add value to them in some way.

If you can be part of a pilot or that kind of stuff. Then, I think that can potentially help get you in before you’re one of their top ten sellers in a category for example.

DAVID ALADDIN: Very interesting. Yeah, I got to start networking harder.

JAMIE DAVIDSON: That’s good. It’s always good so that’s why it’s great to meet you, too. I mean, the one thing in the Amazon community with Jason, Jason’s kind of a more behind the scenes type of guy and so I’ve taken to a networking environment he’s really humble but you kind of recognize that it’s not necessarily his strength but for me, there’s so much, we all can learn from each other and get out there then, a little connection here through. Again, we have some connections in Amazon but even separately like my buddy who’s up there. He’s got to be careful if he wants to make sure that I don’t ask him for any special favors or anything but the more you can just get to know people and they can trust you, whether it’s at Amazon or whether it’s kind of people within the Amazon ecosystem, I think the more all of us can benefit.

DAVID ALADDIN: Behind businesses are the people and that’s what makes everything happen so it’s just something I got to work on harder. What it—

JAMIE DAVIDSON: I’m not yet through with the podcast and everything else to me, I’m sure you may have seen you’ve got a lot of great guests and everything and so I think, yeah, to me that’s part of the reason I was in the podcast too and see what people are up to because it’s pretty inspiring what I see different people doing and learning from it and so whether it’s at Amazon or just, again, that network of other people doing the same thing we’re doing, I think that can [Crosstalk]

DAVID ALADDIN: For me, yeah, for me podcasting is like, it’s like my neighbors. It’s the five closest people I have.

JAMIE DAVIDSON: That’s great.

DAVID ALADDIN: But so, for you, what struggles do you face? Because you guys are at the eight-figure mark, what kind of problems do you guys deal with?

JAMIE DAVIDSON: Yeah. I mean, one of my test pun early is you tend to be, you know, just the legal aspects is one that’s more interesting, that’s not very fun to talk about but then.

DAVID ALADDIN: Super dry.

JAMIE DAVIDSON: Yeah, maybe if we’ll talk with Jason on it, have him over, it become a big part of his time and he’ll fly back to the U.S. to deal with lawsuits, I mean, we’re talking about a lot of money, right?

DAVID ALADDIN: Jeez.

JAMIE DAVIDSON: And there’s, I don’t have, you know, get another boring topic, why don’t we talk about the tax issue again we’ve sold saw like we’re dealing with stuff with California now, and different states, and I don’t, I’m not an expert even to deal through that but the rally is a bigger company. We have to make sure that those things are in order and there’s a lot of, you know, by state, different things coming out that, you know, when you’re small it doesn’t necessarily isn’t super important but even if you’re small but you want to sell the business in a few years and so forth, those are the type of things that you’ve got to make sure your house is in order so kind of non-sexy things, yeah, like taxes, lawsuits, who we pay.

If you can’t afford to pay you have to hire like a good attorney to deal with stuff but, again, those are some of the things that are, you know, again, most people hopefully aren’t going to have to deal with it for a while, but there are other things too like for us to, you know, 60 million, our name is on let’s say closer to almost 100 million including all the other platforms, but, so, we’ve got a lot of people. We just hired 50 new people in China.

We run a lot of operations out of China as well too, so for us to scale to get to 200 million it sounds like, again we’re talking about individual sellers, it sounds like big. But when you’re talking to somebody with a business, you’re pushing hard to really grow. One of the challenges we had early was just to find new categories and products and for us not to fail on those categories. Two years ago, we sold the electric scooters.

DAVID ALADDIN: Oh yeah. It was you?

JAMIE DAVIDSON: Yeah.

DAVID ALADDIN: You’re that guy? What happened?

JAMIE DAVIDSON: Jason and I were on a deck a few years back and I—this is how some of the products have happened. I was on the deck having some wine it was late at night and I sit with my son in our neighborhood, there was a boy who had the product and I said I think this is going to be a popular item this year. At this point, this was like the year, almost a year before that Christmas and so Jason looked at it and did a ton of research and he went over to China, he sent me photos like to all the best warehouses. He was trying to find the one with the best batteries and so he came back and we had about like a million dollars of the inventory, and the product we had was pretty good but because of a lot of crap that came out, a lot of those—

DAVID ALADDIN: For sure.

JAMIE DAVIDSON: Going out catching on fire and so we had about a million dollars of products sitting at a port and…

DAVID ALADDIN: Was that Miami?

JAMIE DAVIDSON: This was in Los Angeles, are there in Los Angeles, so, but it was a loss, right. It was a big loss and we sold some of them through eBay and we have some around the office here.

DAVID ALADDIN: I feel like, I…

JAMIE DAVIDSON: There’s lots of stuff in the office here. But those are things that, you know, we make those mistakes, you know, whether they’re mistakes or bad guesses, it stuff that happens.

DAVID ALADDIN: At least you guys have transportation for the warehouse.

JAMIE DAVIDSON: That’s right. I think, you know, Jason was, yeah, those people are… Actually on one of our videos we have Jason is cruising around on, on one of these.

DAVID ALADDIN: Okay. Maybe Christmas gifts for the employees’ kids or whatnot.

JAMIE DAVIDSON: Yeah. They didn’t last too long. It like right now the people are, with the eclipse going on here, right, everyone’s, people began to shut, some sellers have been able to sell those and make a lot of money and some people have been shut down for safety reasons so, there’s always a risk, right? Whenever you place, whatever the product may be, there are so many different points that you could, you know, you could fail. Hopefully with enough experience and time, that we, again, I’m sure, you’re on the same thing. You kind of reduce your risk and then take advantage of the opportunities where you do, we are doing well, you know, we kind of double down and try to make money, make margin where we can, but there are always setbacks and things that you have to deal with.

DAVID ALADDIN: Let’s talk about outside of Amazon, how you guys branched out, what’s the strategy?

JAMIE DAVIDSON: Yeah, sure. So it’s a . . . we have a guy here that’s dedicated to specifically those relationships in that business so it’s an interesting one too because I always think about, what’s the correct order so to speak. If you’re selling at amazon.com, do you go on Seller Central, do you go to Vendor side, do you go to other countries with an Amazon or do you go to other platforms? And so, we’ve got, we sell on walmart.com, we do a good amount there. Again, just outside of, within Amazon we do other countries, right? Like I told you Canada, Mexico, towards India was kind of a pain to get up and running. Australia is coming soon. We do some of Japan, but off of Amazon, we do Walmart, we do Home Depot, we’ve got Overstock, Wish, we do AliExpress, we’ve got Mckay Calibre. So we’ve got a handful of different ones, and again I’m not, I don’t consider myself an expert those but again we have a basically dedicated guy that handles those relationships for us and goes out and he had a kind of a background on dealing with how traditional retail like that before and so he manages that day-to-day and builds those relationships. And then again we have the warehouse so we get products to those things but…

DAVID ALADDIN: No, it’s awesome.

JAMIE DAVIDSON: Yeah. Yup, so…

DAVID ALADDIN: That’s what I got to do.

JAMIE DAVIDSON: Yeah. I’m sorry.

DAVID ALADDIN: I’m trying to diversity my operations and so I’m not leaning on Amazon too much. It’s been going pretty good, it’s just, it’s a lot more heavy lifting I guess.

JAMIE DAVIDSON: Yeah, yeah. You don’t know like what’s going to take off, like jet for example. Like how’s that going to play out? Is that going to—

DAVID ALADDIN: Yeah.

JAMIE DAVIDSON: Grow big and then die or is it going to be sustainable. But, yeah man, I think on one hand it’s helpful that we’re not, you know, we’re somewhat focused in terms of our category, so I think all these things, if you’re going to look at a lot of different categories and kind of go all over on Amazon, it’s hard to move all these things to concentrate, so you kind of have to pick your strategy to some extent, whether you’re going to kind of stay within a category. You know, if you stay within a certain category so to speak, it’s a little bit easier to try to focus to take these things to other countries or focus to take these things to other platforms just because, you know, you can be a little more focused on your products whereas if you’re spread out more, you know, you may have to stay more on kind of on Amazon or stay, you know, a little bit more limited at least until you grow to enough size. Yeah.

DAVID ALADDIN: Hm. Where do you guys see yourself in 5 years?

JAMIE DAVIDSON: That’s a good question too, so Jason, it’s funny. Things grew really quick and again if Jason, let’s say this. I always feel like Jason almost got bored with the business. It grew so fast and he is definitely really interested and we’ve experimented with some other businesses outside of Amazon and learned how hard other businesses can be like things in Biotech or whatever else, and so…

DAVID ALADDIN: Very cool.

JAMIE DAVISON: The real focus now is to really, really focus on doubling this business. Again, we’re doing a lot on the China side so, you know, there is a market here in the U.S. to buy Amazon businesses and also a market in China that is devaluations can be really big in China.

DAVID ALADDIN: What?!

JAMIE DAVIDSON: So yes there is an aspect of potentially. It’s not an immediate plan so I won’t say, but the possibility exists to have a really big exit potentially on that side, but again, there’s a lot of, a lot to be done there and yet we’re worth, we’re a good sized business but there’s obviously, you know, there’s people there doing certainly more than us and bigger than us and moving really fast and so we’re trying to really—

DAVID ALADDIN: Yeah.

JAMIE DAVIDSON: Focus on doubling the business in the next couple of years and probably in the next three years I’d say and see where that takes us there too. So the other part now is again some of the stuff with Jason and I which is, you know, we’re doing some more training to help people. One of my thoughts is that, hey, we’ve got to decide there are probably things that we can help other people do and help sell. You know, the beginners, I know, you kind of, your podcast help the kind of people that are little more advanced beyond the beginning stage so we thought—

DAVID ALADDIN: Yeah.

JAMIE DAVIDSON: There’s more we can do to help people get to a certain point. I mean, none of it is a magic bullet, none of it is easy but you got to kind of understand the right process and how to, there’s a lot of mistakes you can make if you don’t know what you’re doing so we’re also looking to help focus and help people along the way. We haven’t completely nailed down on it, maybe potentially with some of the higher-level sellers and helping, some of the 10 million to get to 50 million type stuff but yeah that’s definitely on to that, we’re focused on and I’m focused on helping other with as well.

DAVID ALADDIN: I agree, well, you see I would do that but it’s like I feel like if I kept on talking about the same thing, you know, I’ve been there and I’ve done that and I do, actually I’m kind of selfish. Like I do it for myself, like I’m trying to always push myself to get to the double or the triple or quadruple like my sales and revenue, so. But I get.

JAMIE DAVIDSON: Yeah.

DAVID ALADDIN: Yeah, there’s definitely a passion around teaching other people how to do stuff.

JAMIE DAVIDSON: Your podcast serves that purpose. Naturally, right? So you’re…I know myself, there’s just so much of these businesses that you kind of, sometimes you forget what you do know, what you remember before, you don’t realize, oh, yeah, I forgot about that aspect. You’re not focusing on it so even when people that do know some of this stuff. That when they listen through podcast and I’m sure different guests you have. It’s like, it’s just motivating, too or it reminds you, oh, I really need to focus on this area again because there are so many possibilities and so many different things you can focus on. There are so many people interested in it too because while it is a lot of hard work. It is, there’s a really fulfilling feeling to kind of drive something that is your own and build something that you’re proud of yourself. So there are a lot of people that have a desire to get into that, so it’s a matter of how you do it. But there are also a lot of people out there that are teaching things that maybe aren’t in it for the right reasons or they’re not, so the quality is low so—

DAVID ALADDIN: Yeah.

JAMIE DAVIDSON: Careful too who you kind of who you’re working with.

DAVID ALADDIN: You’re coming in from the Kaplan scene so we know the quality, you guys have, I’ve done your books or your company’s books.

JAMIE DAVIDSON: Oh, okay.

DAVID ALADDIN: They did a lot of engineering books and even up to high school and SAT stuff, so, definitely high level.

JAMIE DAVIDSON: That’s why I kind of thought with Jason’s side and my background, and our story together, every story gets a little bit unique but it’s… we’re still formulating an app but we think it’s a pretty good combination, it’s a good team, and it’s also, you got to work with people you like. I mean, one thing with Jason and myself, and there’s also Brad and the team here is like, I was in China with Jason last year and again, he did some other ventures, too and he said, for now, I only want to do deals that are with people that are good people and I want to have fun with the business because you can make… if you do a business deal with the wrong person or the value’s going to lie, it can go really…

DAVID ALADDIN: South.

JAMIE DAVIDSON: Yeah, it can go really south.

DAVID ALADDIN: I feel like that point you just said has to be emphasized so much more because you don’t find out until it’s too late.

JAMIE DAVIDSON: Yeah, people think we just, they’re looking for a deal or it sounds exciting or sexy, like, oh, we’re going to do that and partner with this guy, but yeah, you got to find the right fit absolutely because it’s a big commitment.

DAVID ALADDIN: Well, some people, I feel like in business, some people are just completely different creatures. They’re hard to work with, they’re hard to talk to, they’re just very machine-like, it’s hard to explain but they’re not people-people.

JAMIE DAVIDSON: So, that’s a great point. Yeah, the first—you got to be careful. I even think about well u have friends, right? And friends that want to, and I have a lot of good friends in here in Atlanta, really successful people, different spaces that want to get involved, they want to do something which is great but you got to keep that in mind, too, especially if they’re your good friends. You don’t want to jeopardize—

DAVID ALADDIN: The friendship.

JAMIE DAVIDSON: The friendship but at the same time that’s not a reason not to do something if it’s the right fit, it can be really, really good but like to your point, it’s not always the same. That dynamic can be different when you’re working than when you just have been socializing with someone.

DAVID ALADDIN: Before we end, I want to touch base on how your partnership with Jason like kind of occurred. What, how do you think it formulated and became what it is today?

JAMIE DAVIDSON: Yes. So when I came early on I talked about that. We had this friendship and this dynamic. I think we have mutual respect for each other in terms of—he was launching this business I kind of joked that which is true, I came home one day, my wife said she sold like, I had a desk and this really nice conference table that she sold to Jason for 100 bucks to start his business and at the time I was like, whatever. A hundred bucks, and later on I joke to him, hey, I should’ve traded that for equity for him in the early days.

DAVID ALADDIN: Right.

JAMIE DAVIDSON: With the business, but you know, one we had mutual respect for each other. We had… he could see that kind of my background could add value in terms of what I did.

DAVID ALADDIN: Yeah.

JAMIE DAVIDSON: And again, we had a lot of discussions on our case. A lot of people were like, oh, it’s really lucky that you guys were neighbours, but I said, well, actually we went through it for like several years of different deals, we had it. And he’s the type that said, hey, I’m not, I don’t want a big business plan. I want it over a drink. I came to it with a few business plans in the education space and he had an offer to me a few times and I turned it down one time. Then, he came back with another offer so it wasn’t that easy. When you really get into really doing a deal, things could not work out even though we were in… we were both coming out from a good place? Sometimes, it’s not easy, it doesn’t just magically happen but I finally kind of a line on this deal because I was really passionate about Amazon.

And eCommerce space and obviously, he’d been successful with it and then on the training side we could fit. So, like I said, I guess my biggest point here was it just took a little while it wasn’t easy even though when people are like, sounds like we were neighbours and friends so it happened but that’s really not the case. Still, because it probably took ton of a commitment on my part to be willing to leave a good paying job and so forth.

So it’s one thing to do a part time and you can do that which is great, you can start that way, but when you’re really going to do, you know, go in it every day, everything else, you just have to get it, like I said, the stars have to align. If they don’t, you know, and probably when the deal’s going to work before, part of the deal was it didn’t upset either of us. We weren’t, we kind of understood where each other were coming from and that’s why I’ve allowed potentially to have another deal and look at it down the road where it did make sense and so, and now that the stars are aligning, we’re off and running.

DAVID ALADDIN: No, it’s awesome. How can people contact you and find out more about you?

JAMIE DAVIDSON: Sure, yeah. So you can the Amazon Insiders, we’ve got basically two things we’ve been working progress. We’ve got amzinsiders.net as our blog, we’ve got a few things up there. The amzinsiders.com is our free video training report where I’ve got that and then, I’m also on Facebook, we’ve got a Facebook group. Again, if you look at the Amazon Insiders you can find this but feel free to reach out or private message around like that so I’m happy to connect and again, I love networking with people like yourself and everyone else in the community since we’re all working together so to speak to hopefully, I love seeing people be successful and doing my part to try to add value and at the same time, learn from people like you and others.

DAVID ALADDIN: We’re all against each other on Amazon.com but on the outside, we’re having drinks.

JAMIE DAVIDSON: That’s right. Yeah, you can’t see, I mean, within it each other it’s like me, we’re not competing day to day within our category but you’re right, but at the end of the day, really, West Point would say, cooperate and graduate so to speak.

DAVID ALADDIN: For sure. No, I believe that, too and everyone that I meet with, I find them as allies, I don’t see them as enemies actually, so, but very cool, awesome. Thank you for coming on the show, David Aladdin, Jamie Davidson, out.

]]>Today I’ve got Jamie Davison on on the show, Jamie and his co-founders Jason and Brad combine to sell over $60 million per year on Amazon. He is the co-founder of AMZ Insiders, a coaching program focused on helping new sellers create their own successf...

* Selling on Amazon
* How to build an Amazon business
* How Jamie and his partners business scaled very fast
* Jamies path to getting where is today
* How he quit his job and why
* Amazon strategies and secrets
* How to scale an Amazon business
* How to grow an e-commerce business
* How they are divvying tasks and diversifying
* Important networking tips
* How they plan to double their business

JAMIE DAVIDSON: Hey, thanks David. Great to be on and I appreciate you having me on.

DAVID ALADDIN: Yeah. So can you take us to the beginning, before selling on Amazon? Where did your journey begin?

JAMIE DAVIDSON: Sure, yeah. My journey I guess, everyone has a different path, of course. On my end, I was, way back when actually a military officer, had attended WestPoint and so. In my 20s was kind of had the military background eventually jumped into the corporate word and probably like a lot of people’s careers kind of worked up the corporate ladder the best I could so I had a—I was in banking early on, I’d been recruited over to Home Depot, so I had some retail experience there for a few years running a Home Depot store and then, I kind of fell into the education space with a big test preparation company, Kaplan.

DAVID ALADDIN: Oh, yeah.

JAMIE DAVIDSON: Yeah, yeah. And so then which great education minds and could use some help on the business side so I kind of found that space and stayed in there for a good while. Had some success there and again, worked my way up through just kind of a Senior Executive there and then was part of some private equity deals. We brought in as a Chief Operating Officer and a CEO of another company where essentially, these private equity companies are buying the company. Basically about 50 million dollar businesses or so and they hope to flip them in about four to five years. So I was kind of the hired gun through that approach, so, yeah. So I was kind of—I felt like I had this big title but at the end of the day I was a hired employee, just a senior employee to help kind of lead businesses in these spaces here.

DAVID ALADDIN: I feel like when people amass so much money, they just create so much more money. I mean, 50 million, equity deals, and then they’re trying to flip it to 200? It’s pretty insane.

JAMIE DAVIDSON: Yeah, exactly. Exactly. They’re trying just to take it across the river and in four or five years, probably at least sell it for double, if not more.

DAVID ALADDIN: So, how long was this before you got into Amazon? What year, you think?

JAMIE DAVIDSON: Yeah. So I was in 2000, I mean, kind of the education run I think with Kaplan and a couple of these other companies was 2000’s, early 2000’s, up through 2013.

DAVID ALADDIN: Okay.

JAMIE DAVIDSON: And actually even through the last couple of years. Yeah, so for a while, I came down to—I’m in Atlanta here but I came down to Atlanta ...]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean53:52AS 90: How to save more on taxes as an Amazon FBA Seller with Josh, Founder of CPAonFirehttps://amzsecrets.com/90-save-taxes-amazon-fba-seller-josh-founder-cpaonfire/
Wed, 16 Aug 2017 19:23:28 +0000http://amzsecrets.com/?p=6571https://amzsecrets.com/90-save-taxes-amazon-fba-seller-josh-founder-cpaonfire/#respondhttps://amzsecrets.com/90-save-taxes-amazon-fba-seller-josh-founder-cpaonfire/feed/0Today’s I’ve got on the show, who is a CPA and the founder of CPA On Fire, a tax and accounting firm specializing in working with online entrepreneurs. Over the last few years he has been working very closely with Amazon FBA and other eCommerce sellers to help them with the challenging aspects of accounting and taxes specific to eCommerce sellers.
What you'll learn:
Can you take us to the beginning before you started your accounting firm, where did your journey begin?What’s the story of how you became the official cpa for entrepreneur on fire?
How many employees he has
How Amazon sellers should setup their business.
How to big sellers legally save a lot of money on taxes
What’s tax deductible in our e-commerce businesses
How Donald Trump Saves on Taxes
Distributions to owners vs. payroll
Sales tax and set the record straight. Should we paying sales tax to all the states where FBA is at, or just our state tax
What software tools do you recommend a seller should use. And WHY
And lots more.
Show notes coming soon.
DAVID ALADDIN: Welcome to the show, Josh.
JOSH BAUERLE: Hey. Thanks for having me.
DAVID ALADDIN: So, can you take us at the beginning before you started your accounting firm? Where did your journey begin?
JOSH BAUERLE: Yeah. So I kind of worked in several different accounting fields, I guess I did work at a Fortune 500 company out of college, doing some cost accounting. I moved into public accounting doing taxes for bigger businesses. I did some financial advising and I finally realized that all these jobs weren’t the problem. I kept thinking if I got this new job that would be the job I’d like. But I finally realized that I just didn’t like being an employee so by 2012 I went out and founded my own firm and I started specializing in working with online entrepreneurs and that’s kind of slowly evolved into really working closely with eCommerce sellers and especially Amazon FBA sellers so we got here.
DAVID ALADDIN: How long were you doing the job thing for?
JOSH BAUERLE: I did, let’s see. I did two years out of school at the Fortune 500, I did another two years at a public accounting and then a year at financial advising. About five years.
DAVID ALADDIN: Five years.
JOSH BAUERLE: Yep.
DAVID ALADDIN: So 2007-ish?
JOSH BAUERLE: Yeah. Roughly. Yep.
DAVID ALADDIN: And so when you were like wanted to quit your job was that at that time one of the hardest things to do?
JOSH BAUERLE: Yeah. It kind of came up random. It actually when I was doing the financial advising, the guy I was working for, he wanted to acquire other financial advising firms. And I said, hey, I have my CPA license why don’t we just acquire another CPA firm and we can turn those into financial advising clients. He was all on board for that and we found one that we really liked and he then kind of got cold feet and backed out at the last second and I was like, you know what? I'm still going to go through with it, I'm going to take it over. So I was working with this guy and it was kind of, he was an older guy, he’s looking in to get out of his practice. He basically just let me run the whole practice and I get x’ed him out of the total whole revenue that came in. Then he said, and beside if you want to build your own stuff on the side you can keep all of it. So I started doing that for him while just slowly building my side business and it get to the point where he kind of wasn’t being reasonable for what he want to charge me to buy his, but I felt I've built mine enough that I could finally go out of my own, so.
DAVID ALADDIN: Yes.
JOSH BAUERLE: It’s kind of a hybrid way of going out on your own.
DAVID ALADDIN: So it was a totally different like industry going on while we’re all building our eCommerce businesses.
JOSH BAUERLE: Right. Yeah. It’s a little different.
DAVID ALADDIN: What—if you don’t mind me asking,Today’s I’ve got on the show, who is a CPA and the founder of CPA On Fire, a tax and accounting firm specializing in working with online entrepreneurs. Over the last few years he has been working very closely with Amazon FBA and other eCommerce sellers to help them with the challenging aspects of accounting and taxes specific to eCommerce sellers.

What you’ll learn:

Can you take us to the beginning before you started your accounting firm, where did your journey begin?What’s the story of how you became the official cpa for entrepreneur on fire?

How many employees he has

How Amazon sellers should setup their business.

How to big sellers legally save a lot of money on taxes

What’s tax deductible in our e-commerce businesses

How Donald Trump Saves on Taxes

Distributions to owners vs. payroll

Sales tax and set the record straight. Should we paying sales tax to all the states where FBA is at, or just our state tax

What software tools do you recommend a seller should use. And WHY

And lots more.

Show notes coming soon.

DAVID ALADDIN: Welcome to the show, Josh.

JOSH BAUERLE: Hey. Thanks for having me.

DAVID ALADDIN: So, can you take us at the beginning before you started your accounting firm? Where did your journey begin?

JOSH BAUERLE: Yeah. So I kind of worked in several different accounting fields, I guess I did work at a Fortune 500 company out of college, doing some cost accounting. I moved into public accounting doing taxes for bigger businesses. I did some financial advising and I finally realized that all these jobs weren’t the problem. I kept thinking if I got this new job that would be the job I’d like. But I finally realized that I just didn’t like being an employee so by 2012 I went out and founded my own firm and I started specializing in working with online entrepreneurs and that’s kind of slowly evolved into really working closely with eCommerce sellers and especially Amazon FBA sellers so we got here.

DAVID ALADDIN: How long were you doing the job thing for?

JOSH BAUERLE: I did, let’s see. I did two years out of school at the Fortune 500, I did another two years at a public accounting and then a year at financial advising. About five years.

DAVID ALADDIN: Five years.

JOSH BAUERLE: Yep.

DAVID ALADDIN: So 2007-ish?

JOSH BAUERLE: Yeah. Roughly. Yep.

DAVID ALADDIN: And so when you were like wanted to quit your job was that at that time one of the hardest things to do?

JOSH BAUERLE: Yeah. It kind of came up random. It actually when I was doing the financial advising, the guy I was working for, he wanted to acquire other financial advising firms. And I said, hey, I have my CPA license why don’t we just acquire another CPA firm and we can turn those into financial advising clients. He was all on board for that and we found one that we really liked and he then kind of got cold feet and backed out at the last second and I was like, you know what? I’m still going to go through with it, I’m going to take it over. So I was working with this guy and it was kind of, he was an older guy, he’s looking in to get out of his practice. He basically just let me run the whole practice and I get x’ed him out of the total whole revenue that came in. Then he said, and beside if you want to build your own stuff on the side you can keep all of it. So I started doing that for him while just slowly building my side business and it get to the point where he kind of wasn’t being reasonable for what he want to charge me to buy his, but I felt I’ve built mine enough that I could finally go out of my own, so.

DAVID ALADDIN: Yes.

JOSH BAUERLE: It’s kind of a hybrid way of going out on your own.

DAVID ALADDIN: So it was a totally different like industry going on while we’re all building our eCommerce businesses.

JOSH BAUERLE: Right. Yeah. It’s a little different.

DAVID ALADDIN: What—if you don’t mind me asking, what kind of side cut did he give you? Like percentage?

JOSH BAUERLE: So it was—yeah, so the first year it was 26% of gross revenue. And then the second year it was 35%.

DAVID ALADDIN: Nice. Was he doing over seven figures or kind of like a small firm.

JOSH BAUERLE: No he was. It was kind of funny. He was doing, he did about $150,000.

DAVID ALADDIN: Okay. Very cool.

JOSH BAUERLE: Yeah. But it was funny it was like, I don’t know. Feel like H&R Block, or anything like that style. Like in there boom, in half hour I’m done with their tax, put everything out give it to me, go. My days were like 14 hours straight of boom, boom, boom, boom, boom doing taxes.

DAVID ALADDIN: I wish I could do my taxes in 30 minutes.

JOSH BAUERLE: That’s a—I wouldn’t advise going the route to someone who does it in 30 minutes but I will tell you that that taught me a lot about doing it because that customer sitting there right in front of you, you can’t be like oh, ask somebody like this and you’ve got to figure it out. And I learned more in those two years that I ever did.

DAVID ALADDIN: What’s the story with you becoming the official CPA on Entrepreneur on Fire?

JOSH BAUERLE: Yeah. So that happened when I really started focusing on doing my own stuff it was when Entrepreneurs on Fire first came out. And I was listening on the podcast and I emailed John, and I said, hey, I have my own tax business. If you need any guest on your show, I’d be happy to talk about how I’m building my business, and he wrote back right away and said I don’t need any guest but I need a CPA so it was perfect timing. It worked out well. I did all his stuff for free and in exchange he kind of advertised that I was their CPA and it got to the point that I’m now on their show once a month.

DAVID ALADDIN: That’s awesome. That’s straight hustle. Just by reaching out to one guy, it has launched this whole other brand for you.

JOSH BAUERLE: Yeah, exactly. I tell people I can’t guarantee reach out to someone the first time and it’s going to work out like this? But if you keep reaching out to people, something good’s going to eventually happen.

DAVID ALADDIN: I think so too. It’s like the little small stepping stones that you’ve done, you’ve created your own, you start doing it for yourself for like two years and then now you started reaching out to people and it’s like one thing led to the next like you wouldn’t have, like your brand is slightly based on like the Fire Brand.

JOSH BAUERLE: Right.

DAVID ALADDIN: Which is awesome, it gives you a lot of credibility, too.

JOSH BAUERLE: Yeah. Like you said it all builds off each other I mean if I have approached you and I don’t have all these experience on Entrepreneurs on Fire website and or podcast and the Amazing Seller podcast, you’d probably just say, this guy just want some from my podcast, like he doesn’t know what he’s doing. It’s proof that you’ve done it before. So one builds off the other like you said.

DAVID ALADDIN: Okay. So let’s get into accounting for Amazon Sellers and eCommerce Sellers.

JOSH BAUERLE: Yep.

DAVID ALADDIN: It’s like where did you begin there? So I guess let’s start at the beginning like how just sellers set up their Amazon business like legally?

JOSH BAUERLE: And to be wise? Yes that’s a good question. It is an important question. Keep in mind though that I’m only a CPA, I’m not an attorney. So I might be discussing the tax among other things so there’s definitely legal ramifications as well.

DAVID ALADDIN: Sure.

JOSH BAUERLE: But the one thing that people going to need to understand from a tax perspective is I get to hear people all the time saying oh, I’m going to open an LLC and so I can get all these write offs. And the thing you need to understand is LLC is no different than a sole proprietor. It has a zero tax benefits. In fact the IRS doesn’t even recognize an LLC you are still a sole proprietor if you’re the only owner of that business. So don’t go form an LLC thinking you’re going to save on taxes especially if you’re in a state like California where they’re going to charge you $800 a year just to have that LLC in place.

Now it could be they’d get benefits from that and talk to your attorney about that but if you’re just looking for the tax benefits there’s no benefits from the sole proprietor in the LLC. So what we tell people is you’re basically choosing—when you’re first getting started your just fine. You can go as sole proprietor, if you do want to form that LLC to actually just make things a little more official, totally fine. In fact the LLC offers a little more flexibility to go into other options so I have no issues with that as long as you understand there are no tax benefits.

So if you’re just getting started, you don’t have much coming in yet, maybe you’re not showing a profit yet you’re just fine to go with that sole proprietorship or go with that LLC, whatever you prefer there. Once you start hitting $30,000-$40,000 per year or more in profits, and just to be clear when we say profits we mean after all of your deductions or expenses so your cost for a good sold, your advertizing, your Amazon fees, everything in there. When all of that is accounted for, if you have $30,000-$40,000 left at the end of the year, now is the time to start considering an S corporation.

And the reason is an S corporation does have tax savings. So let’s just real quick let’s learn how these things are taxed because a lot of people don’t get quite how these thing works. Your business, unless you’re a C Corporation and almost none of you should be a C corporation, your business is known as passive entity, which means all of the profits from the business pass through to you the owner and you pay the taxes on that personally. Okay, so you may have an LLC in place, that’s totally fine, if your LLC, if your business profits $50,000 dollars this year, even if you never touched that money personally, every dime in the business, the IRS still says you personally are responsible for paying taxes on that $50,000 profit.

Okay, and not only if you’re a sole proprietor and LLC, not only are you going to pay ordinary taxes on that just like you’re… if you’re at a job, you’re also going to pay the self-employment taxes which is an additional 15.3% tax. Know that’s there’s Social Security and Medicare taxes though when you have a job they take half of those out. You probably don’t know your employers are paying the other half of that maybe, but now when you’re the business owner, you’ll be paying both halves of that. So once you start getting serious money in this business, $40,000-$50,000 or more, you’re going to start getting hammered on taxes, ordinary and self-employment.

Where the S corporation comes into play works the exact same way that $50,000 passes through to you the owner whether you take all, some, or none of it out, still passes through to you, you still pay all that ordinary taxes on it but you do not pay that 15.3% self-employment tax. So once you start getting out there profits that could be a pretty massive tax savings to just…

DAVID ALADDIN: And that’s because the business is responsible for paying the taxes not, it doesn’t go pass the person?

JOSH BAUERLE: No, so that the S Corporation is still a passive entity, works the exact same way. That $50,000 still passes through to you as the owner, but you only get hit with the ordinary taxes you’re not getting hit with that additional 15.3% self-employment tax.

DAVID ALADDIN: I kind of get that.

JOSH BAUERLE: So that it’s a tough concept to get. So here’s a general checklist that people can use and keep in mind every situation is unique. Talk to a CPA about this before you dive into it. But as a general guideline if you’re just getting started or you’re making less than $30,000 per year in profits, all right, and you have no legal concerns, you’re not that worried about that yet, go ahead and go for sole proprietor, totally fine just hit the ground running nothing that you need registered. If you’re making less than that $30,000 per year profits and you want to maybe make things a little formal, maybe get a little legal protection go ahead and form that LLC.

Once you get up above that $30,000-$40,000 per year in profits now is the time to make the move to be an S Corporation. Now you can start saving thousands of dollars per year in taxes. And there are some things that go into that. There are some reasons that we wait for $30,000-$40,000 per year to do that because there are some cost involvements moving to that S Corporation, a few things you got to get set up. But once you’re there the benefit is more than outweigh the cost and as that income goes up those savings will continue to grow.

DAVID ALADDIN: Do you know?

JOSH BAUERLE: Does that make sense?

DAVID ALADDIN: Yeah. Do you know if your EIN number changes if you switch them?

JOSH BAUERLE: It does not. So basically—

DAVID ALADDIN: Okay.

JOSH BAUERLE: An S Corporation is just a tax selection, so what we do first is form an LLC and then if you didn’t already have one. And then we just we’d file a form with the IRS that say, I want my LLC to be taxed as an S Corporation and everything else remains the same.

DAVID ALADDIN: Very cool. Okay I say that because you know when we changed like significant information inside of Amazon Sellers Central.

JOSH BAUERLE: Yep.

DAVID ALADDIN: Yes. It’s a nightmare.

DAVID ALADDIN: Yes. Yep. Exactly. That’s what’s cool about it. That’s a good point. For that reason it is a good idea sometimes just to start with that LLC. Because from the LLC you can make that move to the S Corporation. So the State of California maybe a little more hesitant because they do have that $800 fee per year, but like you said if you do that from the beginning when the time comes to make a move into the S Corporation, now you only have to make that tax selection, you’re not changing anything else on the back and in Amazon.

DAVID ALADDIN: Now that’s good to know. That’s awesome. Okay so—

JOSH BAUERLE: Just to give you an idea, just one more thing, to give you an idea how powerful that move may be? If you are at a $100,000 per year in profits that can easily save you $8,000-$10,000 per year in taxes.

DAVID ALADDIN: I think you said the between the Social Security tax and the Medicare tax that’s paid over. That’s 12%, 12.5%?

JOSH BAUERLE: 15.3.

DAVID ALADDIN: 15.3? Jeez, that’s a lot. Yeah. Once you get over a hundred—

DAVID ALADDIN: That’s just big. Yep.

DAVID ALADDIN: To 300, yeah. Okay, so besides switching to S Corp, what are like some of the smartest and like biggest sellers legally doing to save a lot of money? Because I feel like there’s a lot of things going on when you get to that height where you can just cut taxes down.

JOSH BAUERLE: Yeah. I’d say it probably feels like there’s more than there is. But what we see is a lot of people doing once they start making serious money is the one big thing they’re doing is they’re finding a way to start to deduct their travel. So they’re going somewhere overseas and they’re turning it into a business trip, whether that’s going to a conference for eCommerce sellers or Amazon sellers or it’s going to see their suppliers or whatever it is. If they take a week long, two week long vacation for their family, they’re going to find a way to make at least a portion of that tax deductable by making it business related.

So I guess that the biggest thing we see people doing is starting to turn personal expenses into business expenses. All right. So a room in your home, maybe you start using your garage to store your inventory, like on FBA if I don’t need that but there are some people who do that, putting a room in their houses and office and start to deduct that. Cell phones, things that they use personally, home internet; those are personal expenses now you have a business now you can start to deduct that stuff.

The big thing is the IRS has a standard of, in order to deduct this you have to show that it increased the bottom line of your business, okay. So as you give this go deduct this to every random thing that you spend money on, but if you can show that by spending money on this it increased your business in some way? Then we can find a way to deduct that, all right. So your home internet, very, very clear, you can’t run an Amazon business without your internet, right? So that’s a very clear business deduction even if you’re using it personally in the evenings or whatever. Anything you’re spending money on run that through your mind is this helping my business in some way? If the answer is yes, there’s a good chance we can deduct at least a portion of that on your taxes.

DAVID ALADDIN: Okay, when you say deductions, like so does that mean like deducted from my profits and then?

JOSH BAUERLE: Yeah. So that’s a good question. Right off’s are a little confusing to people because some people assume, oh, I get a $10,000 right off that means I reduce my taxes by $10,000 dollars. What a deduction or a write-off is it reduces your profits like you said. So if you bring in a $100,000 total gross revenue in your Amazon business, and then you pay $30,000 of that to Amazon, now you have $70,000. And let’s say your cost of goods sold worth $35,000, now your profits are $35,000. Then you deduct $10,000 in advertising, now your $25,000. Then we start throwing off these travels and home internet and cell phone, and you deduct another $10,000. Now you’re down to $15,000. And that’s what your profits are and that’s what your taxed on is $15,000 dollars. So all write-off does is decrease the amount of money that you are taxed on.

DAVID ALADDIN: I get it so yeah you want to decrease—you want to have as many deductions as possible to decrease the profit that get’s taxed on?

JOSH BAUERLE: Exactly.

DAVID ALADDIN: Okay. So we got to figure out where we’re going to get most deductions.

JOSH BAUERLE: Right.

DAVID ALADDIN: So I’m going to try in September with Shaun Hart [00:15:13], that entire trip ticket, hotel cost, those are all deductions?

JOSH BAUERLE: Yeah. So let’s run through this here, how long are you there for?

DAVID ALADDIN: Two weeks?

JOSH BAUERLE: Okay. And most of the time spend on business?

DAVID ALADDIN: Yeah, probably majority.

JOSH BAUERLE: Okay so if the majority of the time is spend on business and it’s very clear, 100%, the flight, the hotel, rental car when you’re there. Anything you’re spending money on, it’s a business trip, and you can deduct all of that.

DAVID ALADDIN: And then so, okay. Move and pass deductions, let’s talk about inventory. Let’s say—

JOSH BAUERLE: Yeah.

DAVID ALADDIN: Let’s say I buy about a hundred grand of inventory.

JOSH BAUERLE: Yep.

DAVID ALADDIN: All right. Where does this all fit in to the whole puzzle?

JOSH BAUERLE: Yeah, so inventory is by far the most confusing part taxes for an eCommerce sellers because the IRS says, so basically any other expense as soon as you spend that money it’s an expense and you can deduct it. Do you go by $10,000 worth of advertising today you can deduct the $10,000. With inventory? You cannot deduct it until you sell it. Okay, so if you buy a $100,000 worth of inventory this year and at the end of the year you still have $50,000 of it left in stock? You can only deduct the $50,000 of that on your taxes. Does that make sense?

DAVID ALADDIN: Yeah, so basically we have to get to zero inventories by December 29?

JOSH BAUERLE: Yeah. I mean that’s the ultimate goal. I mean that would make things easy. The thing to remember is you’re going to ultimately get to deduct it so let’s say that next year you sell that $50,000, now you’re deducting $50,000 next year that you didn’t pay for that year you paid for the year before, so it all evens out in the end. But where we see people running into trouble is they get to the end of the year and says oh, I’m going to go buy a big inventory purchase to get my taxes down, but the problem is almost none of that sells by the end of the year, so now they didn’t reduce their taxes and now all their cash flow is tied up in that inventory and so they don’t have any money to pay those taxes.

DAVID ALADDIN: Yeah. So how’s that work?

JOSH BAUERLE: Basically you got to pay it one way or another. The IRS is good about letting you set up a payment plan. Say you—as long as you owe less than $50,000 they’ll let you set up a payment plan. And as long as you keep the amount that you propose you’ll get it paid within 5 years they’ll typically go with it. So don’t get too caught up there but you just want to be mindful of your cash flow. Don’t go buy a huge inventory purchase on December 30, and think you’re going to get a tax deduction. Now you have all these inventory and no money to pay taxes.

DAVID ALADDIN: Interesting. Yeah. Okay, let’s talk about sales tax.

JOSH BAUERLE: Yeah. The other fun one.

DAVID ALADDIN: Yeah. I feel like we’re getting taxed everywhere, first of all.

JOSH BAUERLE: Yeah. Well the good thing about sales taxes is it’s not a tax you’re paying. Your customers are paying it. So as long as you’re doing it correctly it’s something that’s added on to the purchase price and then you’re just paying it—you’re just collecting it for the government and paying it to the government. But the big question comes is what states should you be collecting that in? And for most people that’s pretty clear. Because all of this is the state that you have to have a clear presence in, you have to collect and pay sales tax in that state. All right.

So for most people it’s just where they live and where they run their business from. So I’m in Ohio. If I set up my Amazon business, the common sense would say I’m only located in Ohio, I only have to collect and pay sales tax and sales to other people located in Ohio. All right. That would be pretty simple. But where Amazon FBA becomes a little different is one form of physical presence is inventory located in the state. And Amazon can store your inventory in what is it now, 22 different states?

DAVID ALADDIN: It’s out there, yeah.

JOSH BAUERLE: Yep. I think it’s 22 different states. Seems like you can start your inventory in. So technically speaking, you could have what they call nexus is 22 different states or 23, if you live in a different one. And technically you should be collecting and paying sales tax on sales within all 22 or 23 of those states if those states all require sales tax. So that’s what the rules say. Now I’ll tell you that most Amazon sellers, I would guess 85%-90% or more are only collecting and paying in the state that they are located, okay. So what State are you located in, David?

DAVID ALADDIN: Florida.

JOSH BAUERLE: Florida? Okay. So most people in your case are just saying, okay I’m in Florida, my business is in Florida, I’m going to collect sales tax on all sales from people within the State of Florida and only within the State of Florida. Right? That’s what most people are doing. And to date, we have not had any clients that, any of the other states have come back on about it. But you want to be careful here, because the letter of the law says that you should be doing it in any state that Amazon stores had inventory. Okay. So what we’re advising most people at this point is, all right, start with your home state, that’s a must. If you’re not doing that you need to do that like tomorrow.

Get that set up and start doing your home state. From there start monitoring what states you’re starting to have a large amount of sales in. And then maybe you slowly move on to those states. So the big one for most people is going to be California, right? You’ll probably have a lot of sales in California. So maybe you go register for sales tax and start collecting and paying in California. Then you look at Texas. Okay, now I’m starting to have a lot in Texas, let’s start registering and paying in Texas. So just slowly monitor change.

It’s a little bit of a risk-reward thing. If you have a hundred dollars per quarter of sales in Illinois, you probably don’t have to worry about Illinois coming after you. So I’d do a little bit of risk-reward here. Start out in your home state and slowly work your way out. Make sense?

DAVID ALADDIN: I’ve asked Stellar Sellers and it seems like they’re only paying their sales tax in that particular state that they live in as well.

JOSH BAUERLE: That’s what most people are doing. And like I said, I personally have not any clients that other states have come back on but the constant rumor is its right around the corner with these states we’re going to get together and say okay, let’s go after all the Amazon sellers.

DAVID ALADDIN: I feel like it would be a paper disaster if you have to apply to every state and, I couldn’t even imagine like if there’s a seller that does that at this moment.

JOSH BAUERLE: I mean we actually worked with a few that do it in all 22 states.

DAVID ALADDIN: Wow. Yeah.

JOSH BAUERLE: Yep. Because they’re big enough, I mean they are doing, if we have something to do with 10 million dollars they just don’t want to risk it they’re registered in every state.

DAVID ALADDIN: Now that makes sense.

JOSH BAUERLE: It’s time consuming, it’s expensive to get registered in those states so I totally get why people aren’t doing it. The one thing I say is if you’re to the point where you’re going to start doing this I highly, highly recommend using something like either TaxDrive or Taxify. They can link right it up with your Amazon account and they can automatically file on every state you want to file them for you. Just take it completely out of your hands.

DAVID ALADDIN: Yeah. Like I heard if you stop doing eCommerce for whatever reason you set to file or cancel out this are…

JOSH BAUERLE: Yeah. If you don’t have sales they still expect a zero return for you physically going close out of that account.

DAVID ALADDIN: Yeah. Well it was stressing me out for a while because…

JOSH BAUERLE: It’s a stressful situation like—

DAVID ALADDIN: Yeah.

JOSH BAUERLE: I’m sure there are some people are going to give me this and to this saying holy crap, what do I do?

DAVID ALADDIN: Yeah.

JOSH BAUERLE: If that’s you do what we’re talking about start out on your home state that’s a must. You got to do that. Don’t overstress about the other states just kind of talk to other people, talk to your CPA and slowly work your way up to the other states if you feel like you need to.

DAVID ALADDIN: I feel like it’s like a huge grace on right now.

JOSH BAUERLE: It’s exactly what it is.

DAVID ALADDIN: I think it’s kind of start by with Amazon like they didn’t collect the sales tax for you.

JOSH BAUERLE: I’m sure that your audience all makes part of their living off Amazon. We all love Amazon but they can easily end this problem by collecting it themselves.

DAVID ALADDIN: Just collecting it. Exactly. I was thinking the same thing. I think it would be something political that would force them into that, too.

JOSH BAUERLE: Well, the way the rules technically say it is when you sell on consignment for someone which is basically what is Amazon is doing for you, that you’re in charge of the sales tax so the way most people read the rules is Amazon is that one in charge of that, but guess what Amazon has more power and they can hire more expensive attorneys so—

DAVID ALADDIN: Yeah.

JOSH BAUERLE: If the states come after you, you’re on your own.

DAVID ALADDIN: And just a side note for those listening, once you get your sales tax number you can put it into Amazon and then it starts collecting tax for that state, so for the past two years for me that sales tax comes out of my pocket but moving forward it will be paid by or collected by Amazon and then I can spend it for the sales tax. You know really into Florida.

JOSH BAUERLE: Yeah, that seems super confusing to try and figure out like I got to know which sales where at Ohio. Amazon will do all that for you, you just got to basically be a click in the button and tell them which state you want to start collecting that in, right.

DAVID ALADDIN: Yeah. Actually I use TaxDrive for calculating the number from that.

JOSH BAUERLE: Right.

DAVID ALADDIN: Right, like off.

JOSH BAUERLE: Right. Exactly. That I highly, even if you’re only doing your home stay, I highly recommend doing TaxDrive.

DAVID ALADDIN: Yeah.

This episode of AmzSecrets is brought to you by our Amazon Seller tools, AmzSecrets.com, VIP, Super Charges, your Amazon listings. It uses big data from Amazon and Google in a meaningful way to increase the traffic through Amazon listings. I use them with my brand and I am personally ranked in the top five of some major Amazon categories. It’s not a golden bullet as you need marketing and good brand strategy but having the ultimate Amazon listings goes a long way. To learn more about it, go to AmzSecrets.com.

Okay. So this is kind of unrelated, but I’m curious like do you know how Donald Trump, you know, avoids taxes?

JOSH BAUERLE: I get this… yeah. The thing is like he, first of all he hasn’t released his tax return so we don’t know what he does and doesn’t pay in taxes. But when you hear of someone like that, not paying taxes, it’s a little bit misleading because Donald Trump was big into real estate and what happens is when you buy real estate, if he goes and buys a 100 million dollar of real estate, he doesn’t get a 100 million dollar deduction like a normal expenses. You have to depreciate that over 39 years. Okay. Take a 100 million dollars and divided by 39 years and he’s taking that each year going forward even though he didn’t buy it in that year. So if 5 years after that he has a year where not much income came in, he can have depreciation from prior years that wipes out all of that income. So it’s misleading to say that he doesn’t pay taxes, he’s not given any tax advantages that you and I aren’t getting. He’s just buying really, really expensive assets that can’t be deducted all at once, they had to be depreciated over several years.

DAVID ALADDIN: You mean like, increasing in value? Like the—

JOSH BAUERLE: No, so let’s just keep the number simple. Let’s just say that it’s a hundred thousand dollars and we have to deduct it over ten years. The year he buys it, he can’t take a hundred thousand dollar, instead he takes $10,000 per year for ten years.

DAVID ALADDIN: I see.

JOSH BAUERLE: So five years down the road, he’s given a $10,000 deduction for something he bought five years ago.

DAVID ALADDIN: And so he’s got multiple properties that are given that deduction.

JOSH BAUERLE: Right. So in any given year his income goes down he easily have enough prior year deductions that wipes out all those income out.

DAVID ALADDIN: That’s interesting.

JOSH BAUERLE: It’s actually a disadvantage because he’s not given to take it all at once.

DAVID ALADDIN: Yeah.

JOSH BAUERLE: But you could run into certain years where it’s enough that it wipes out all your taxable income.

DAVID ALADDIN: Okay. So—

JOSH BAUERLE: All right?

DAVID ALADDIN: Yeah.

JOSH BAUERLE: Trust me. The rich pay their share of taxes, trust me.

DAVID ALADDIN: How about—

JOSH BAUERLE: We’re doing some taxes for some rich people and they pay some taxes.

DAVID ALADDIN: Okay, I’m currently setting up payroll because—

JOSH BAUERLE: Yep.

DAVID ALADDIN: I’m buying a house and I want to see payroll checks. Distribution versus payroll and like what distribution that you won’t get taxed on in the Medicare and the Social Security so…

JOSH BAUERLE: What type of entity are you?

DAVID ALADDIN: LLC, I think. S Corp at the moment, yeah.

JOSH BAUERLE: You are an S Corp, okay.

DAVID ALADDIN: Yeah.

JOSH BAUERLE: Okay. This depends on your entity. Number one if you’re an S Corp you have to be on payroll, okay. There’s no way around that. You can’t just take your distributions up. And the reason they do that is because as we talked about with the S Corporation, those profits, when you take them out of distributions they don’t get hit with that self-employment tax at 15.3% tax. So the IRS came in and said, okay, fine. We’ll let you have that tax free, those security tax free but we’re going to make you get them payroll, because when you pay yourself a salary we’re going to turn around and get hit in payroll taxes which is that same 15.3% tax. Okay, so that’s why we have, when I talked about you don’t want to do an S Corp unless you’re at that $30,000-$40,000 premium profits that’s the reason why it’s because they’re going to make you give on payroll and that’s going to eat up a chunk of the savings.

Okay, so if you’re not an S Corp this conversation doesn’t apply to you. If you’re Sole Proprietor and LLC this conversation doesn’t apply because your tax on the 100% of the profits both ordinary and self employment tax so you can take out as much in distributions as you want or as little in distribution as you want and it’s going to be treated at the exact same way for tax purposes.

DAVID ALADDIN: Okay, let’s…

JOSH BAUERLE: It…

DAVID ALADDIN: Yeah. Let’s say like I am an LLC. And I want to get payroll just for the sake of getting paychecks and you know.

JOSH BAUERLE: You can’t. You’re actually not allowed to take payroll if you’re an LLC and an owner of an LLC.

DAVID ALADDIN: Even if it’s a multi-member LLC?

JOSH BAUERLE: The owners of the LLC technically cannot be on payroll. They pay themselves in either distribution or what they called guaranteed payments.

DAVID ALADDIN: Wow, okay. And then so—

JOSH BAUERLE: I mean—

DAVID ALADDIN: Go ahead.

JOSH BAUERLE: So it actually doesn’t matter like it’s kind of weird that your loan officers are telling you that you need to take payroll because on your tax return it all shows up as income. So my guess is if it like, you had your CPA, write them a letter and say, hey, this was all income to him so you can see it online, 17 of this tax return and they would understand. So if you’re an LLC if your loan officer tries to say, oh, you have to be on payroll so we can get you a loan, that’s not necessarily true. So just make sure that you’re communicating with them and what type of entity you are and how actually are you paying yourself.

DAVID ALADDIN: How would you show distribution to—

JOSH BAUERLE: Addition.

DAVID ALADDIN: Yeah.

JOSH BAUERLE: They actually don’t show because it doesn’t matter. So because your tax on 100% of the profits. So the IRS allows you to take those profits out tax free because they are already taxing you on the profits. So if your business makes $50,000 after all of your expenses, the IRS says, all right were taxing you personally on all $50,000. You can go ahead and take off $50,000 out in distributions; you can take none of it out in distributions it doesn’t matter because we’re taxing you on all $50,000.

DAVID ALADDIN: And that $50,000 you get to have some business side and when you take—

JOSH BAUERLE: No. No business tax, but your business will never pay any taxes.

DAVID ALADDIN: That’s why I have an accountant.

JOSH BAUERLE: It’s confusing. It is confusing. Keep in mind this name, Passive Entity. Unless you’re a C Corp and again almost none of the audience should ever be C Corporation. Unless you’re a C Corporation, it is what they call a Passive Entity, which means all taxes pass through to you as the business owner. I see. So when I take a distribution it’s only being taxed as a personal, under my personal, you know.

JOSH BAUERLE: It’s not being taxed at all. Distributions have no taxes.

DAVID ALADDIN: Zero?

JOSH BAUERLE: It depends on the—you’re taxed on the profits. So technically your… when you take a distribution all you’re doing is taking out those profits that you’re taxed on. So your business—

DAVID ALADDIN: I see. I see. Yeah. But… Go ahead.

JOSH BAUERLE: Let’s say it’s $50,000. When you go to file your tax return, all your tax return, and personal tax return is going to show is $50,000 of income, because that’s what your business made. So whether you take $50,000 in distributions, $25,000 in distribution that makes no difference on taxes. You’re taxed on the $50,000 profit.

DAVID ALADDIN: So it doesn’t make sense to take a payroll technically. But wave on the distribution…

JOSH BAUERLE: Unless you are an S Corp in which case you have to, right? So the S Corp is where things get interesting, because the S Corporation, the IRS says, you have to take a payroll. There’s no way around it because we don’t want you saving all of that money on the Self-employment taxes. So that’s where it comes in. All right, how much do I take in payroll, how much do I take in distributions? Because you want the distributions to be as high as possible and the payroll to be as low as possible. That’s where you get the tax savings.

So if the IRS says you have to have what they call the reasonable salary, okay? So they’re not going to let you say, I’m an S Corporation, I’m… okay, fine. You tell me I have to be on payroll I’m going to pay myself $5000 a year. Find them on payroll. That’s not good enough. You have to basically the standard is, what would you have to pay to replace yourself in the business? So let’s say you want to keep the business, right, but you want to be out of the day to day, what would you pay someone to replace you? And I get those Amazon FBA sellers that are hard because you can’t exactly go on monster.com and look for job openings for Amazon FBA running a business, right? So it takes a little bit of guess work but I guess it just comes down to common sense like if your business is making $200,000 a year, you can’t go pay yourself $10,000. You want to be up close to the $40,000-$50,000 per range in the salary portion.

DAVID ALADDIN: No, it’s awesome advice. I was thinking maybe you’re in the six figure range but…

JOSH BAUERLE: Yeah, you want it—I mean it depends on your situation, too. Like if you’ve recently think that you could not pay anyone less than a $100,000 to replace you in the business then pay yourself $100,000. But keep in mind that tax saving come by keeping that salary as low as possibly can.

DAVID ALADDIN: So distributions are the secret? Payroll sucks.

JOSH BAUERLE: It’s basically… now that sucks because you get hit with those self-employment or payroll taxes, but you’re also going to have to pay it. You’re going to use the payroll; I’m assuming you’re using a payroll company?

DAVID ALADDIN: Yeah.

JOSH BAUERLE: Right.

DAVID ALADDIN: Sorry. Go ahead.

JOSH BAUERLE: No. Now you have to start paying a payroll company do it for you. So some people think, okay, fine, I’ll pay myself a salary, all right, here’s my check for $5000, there’s my salary for the month, like no. You got to actually pay payroll taxes on it. You got to file all the payroll tax reports. There are some that are monthly, some that are quarterly, some that are state, some that are federal. This is a pain in the butt. So you want to use a payroll company for it even if you’re the only employee in your business.

DAVID ALADDIN: Yeah. I’m in the exact same process right now and doing it through Zenefits. [ph]

JOSH BAUERLE: Okay.

DAVID ALADDIN: Yeah. I’m sending myself a salary. The low that you can get it at a reasonable amount make the most sense because—

JOSH BAUERLE: Absolutely.

DAVID ALADDIN: It seems they just kill you with Medicaide and Social Security.

JOSH BAUERLE: So that’s exactly, think… this is why the S Corp saves you money. Think of all you’re paying in that Social security and Medicare, if you’re an LLC, 100% of your business profits will be paying all of that. That’s why the S Corp says—

DAVID ALADDIN: Say that one more time?

JOSH BAUERLE: So if you’re a Sole Proprietor or an LLC, all of the profits in your business are paying that Social Security and Medicare tax. So as an S Corp it’s only the salary portion. When you’re a sole proprietor and LLC all the profits pay that.

DAVID ALADDIN: Let’s talk about Social Security for a second because does that even like—

JOSH BAUERLE: Okay.

DAVID ALADDIN: Relate to us when we’re older?

JOSH BAUERLE: Yes. Yeah, well, who knows, your guess is as good as mine if that is still around coz it’s not looking good. But yeah, I mean technically what’s happening is you’re paying in now so when you retire you can take a portion of your life time earnings in every month in Social Security checks but basically what you’re doing is paying for the people that are currently retired to take their earnings.

DAVID ALADDIN: Sounds like a Ponzi scheme.

JOSH BAUERLE: I don’t understand how it’s not a Ponzi scheme to be honest with you.

DAVID ALADDIN: Yeah. I heard that the most you can make is about $2000 a month off social security, so if you’re paying a large amount it doesn’t make sense to do that.

JOSH BAUERLE: Yep. It’s a tough process and I mean there’s no guarantees that—how old are you?

DAVID ALADDIN: Thirty.

JOSH BAUERLE: Okay, yeah, I’m thirty-three. There are no guarantees that you and I will ever see Social security in this current form.

DAVID ALADDIN: That’s yeah. So depressing.

JOSH BAUERLE: Depressing.

DAVID ALADDIN: All right. So what software tools do you recommend for sellers?

JOSH BAUERLE: Yeah. So we haven’t talked about bookkeeping and that’s… this is the number one most important part of all this. You have to know your numbers, all right. So all these deductions we are talking about, they’re worthless if you’re not tracking them. And to do this I highly recommend some type of accounting software. For me, for eCommerce sellers and especially Amazon sellers, I think Xero is the best one you can go with here. Xero, X E R O. They can sync up with a lot of the Amazon tools like X20 is the big one, right, that Amazon sellers use. It syncs right up to that. But basically all its going to do is you’re going to have a business bank account, business credit card, whatever other business accounts that you have, that software is going to sync right up to it, so every time spend money or every time money comes in it’s going to automatically hit that software and all you’re going to have to do is go in and say what it is for. Okay. So if you go and spend $10,000 on Facebook ads, that $10,000 is going to show up in Xero, all you have to do is go in there and label that it’s for advertizing.

So if you’re going to try to do the bookkeeping yourself, I highly recommend you using some type of software. So there’s Xero, there’s Quickbooks online, there’s even a few free ones like Wave. If it were me I’d just go with the Xero because it’s pretty compatible with Amazon but any of those will work, just make sure you’re using some kind of cloud base software that’s going to sync up with your bank accounts. Other tools, I mean, that’s… if you’re going to start doing the payroll stuff, Gusto is the one that we typically use. They’re very cheap, they’re I mean relatively speaking, they’re very cheap. They’re $45 a month, if you’re the only employee. Zenefits, as you said they’re ones you’ve used before. But to me the ultimate is when we’re talking taxes are you’ve got to have that bookkeeping under control. You have to have some type of system in place.

DAVID ALADDIN: Great idea. It starts to get to become a nightmare.

JOSH BAUERLE: Yeah, I can’t tell you how many people we go to do the taxes at the end of the year and they just try and give us a bunch of receipts. I’m like what? Wait a minute here, you have to keep this organized we can’t look through all your receipts and put them together for u. This stuff has got to be organized.

DAVID ALADDIN: What are the tips you have for sellers?

JOSH BAUERLE: As far as taxes and accounting?

DAVID ALADDIN: Yeah.

JOSH BAUERLE: You know, it’s being organized, if we’re talking about this book keeping and you’re saying you hate this, I don’t have time for this, I’m not going to do this—go hire a bookkeeper. You can… bench.com is one who we partner with a lot. They can, their fees probably a year, you can pay somewhere $300-$400 a month. If you’re doing serious money in Amazon this is well worth the cost. You can find individuals that will do this for you maybe a little cheaper. All right. So but if, you either need to get the software to do it yourself or you need to pay someone to do it if you know you’re not going to do it, but one way or another, it has to get done.

Going back to the inventory, make sure that you know that if you spend that big money on inventory at the end of the year that is not going to be a tax deduction. So make sure you’re going with your cash flow properly. Make sure you’re setting aside money for taxes, okay. Remember that, those taxes are going to come due. Don’t think that because you’re personally not taking money out of the business that you’re not going to get hit with any taxes. You’re taxed on the profits regardless of what you take out. And then make sure that you’re in that proper entity, all right? If you’re doing more than $30,000-$40,000 per year in profits, you got to make sure you’re doing that S Corp or a big chunk of money is getting thrown away to Social Security and Medicare taxes.

DAVID ALADDIN: I feel like this is the perfect episode for every Amazon seller to listen to.

JOSH BAUERLE: It seems, there’s a lot… it’s a confusing industry when it comes to accounting and taxes, and it doesn’t have to be that way if you can just get the right information and I don’t recommend doing this—I know it sounds self-serving for me to say go hire a CPA because I am a CPA, but this stuff gets confusing. Usually—

DAVID ALADDIN: For sure.

JOSH BAUERLE: Yeah. Usually what we’re telling you here is to understand the basics but then go talk to a qualified person. Make sure that someone understands the eCommerce world. Make sure someone that doesn’t, when you say you’re just doing Amazon FBA, say what FBA stands for? Let them know. Make sure they know your industry because there are some very specific things to your industry that can be done.

DAVID ALADDIN: Awesome. Are there any like tax tricks that we haven’t discussed yet? That is legal.

JOSH BAUERLE: Yeah. That’s the key, right. You know, nothing standing out. It really… honestly, it comes down to doing the basics. It’s making sure that you’re in the right business entity. It’s making sure all these personal expenses can become business expenses, that you’re doing it right. Like in your case, take a trip to China, and make it a business expense. It’s just making sure everything that you can do is, that you’re taking advantage of everything you can take advantage of and that comes down to working with the right person. The only other thing I guess once you’re making serious money, like high like… $300,000, $400,000 for more per year in profits, then we can start doing more advanced stuff like opening up retirement accounts within the business. So we can open up a Zafra 401K within the business. You can put $53,000 per year in that it completely wipes out $53,000 of taxable income.

DAVID ALADDIN: Okay, that’s huge! Yeah.

JOSH BAUERLE: Exactly. So as profits go up, now we can start getting creative in using cooler things like that.

DAVID ALADDIN: Can we actually go more into that?

JOSH BAUERLE: Yeah.

DAVID ALADDIN: There are definitely a bunch of us who are in that kind of category. So you said open up a 401K within the business?

JOSH BAUERLE: Yeah. So, either a 401K or a Zep is what I would go with. They both have a $53,000 dollar per year limit of what you could put in. The way you go about doing that is differently. So it’s with a Zep, you can put up a flat 25% of your salary if you are an S Corporation which if you are in that profit level you’re going to be an S Corporation, okay. So that’s where things get a little tricky is you want your salary to be as low as possible in one respect, but if you want to max out that Zep, then it would be 25% of your salary. So if you want to get all the way up to the $53,000, you got to pay yourself $212,000 per year in salary. All right. The 401K actually is a little easier to contribute that $53,000 per year max. They let you do $18,000 right off the bat, as long as your salary is at least $18,000 per year, you can do $18,000.

DAVID ALADDIN: Wow.

JOSH BAUERLE: Then, it’s an additional 25% of your salary. So to max out that $53,000, you’d have to pay yourself $140,000 in payroll. Right that’s still high but it’s obviously $72,000 less plus Zep. So there are pluses and minuses to both. The 401K is a little harder and a little more expensive to set up. The Zep’s easier. So make sure that you talk to a financial adviser or your CPA which one’s best for you, but the bottom line is if you’re making serious money on this thing, that’s $53,000 per year you’re just wiping off of your taxable income and it’s not like you’re spending money to do it. You’re getting a tax break to save more money.

DAVID ALADDIN: What! That’s huge. I felt like my accountant—

JOSH BAUERLE: Right.

DAVID ALADDIN: Didn’t say this, I don’t know why.

JOSH BAUERLE: Right.

DAVID ALADDIN: Hope he’s not listening to us.

JOSH BAUERLE: So that’s… I mean, in order to get a $53,000 production in advertising you have to spend money in advertising, right? With this, you’re just putting it in your retirement savings account.

DAVID ALADDIN: Yeah. And it’s going into the market, too.

JOSH BAUERLE: Right. Exactly. And it’s growing tax deferred until you retire. So you’re not paying taxes on any of the income until you pull it out.

DAVID ALADDIN: That’s powerful.

JOSH BAUERLE: It’s huge. Yeah.

DAVID ALADDIN: Yeah. I have a personal 401K that I contribute to.

JOSH BAUERLE: Okay.

DAVID ALADDIN: But that seems kind of pointless. You just put the thing on the business.

JOSH BAUERLE: You have an IRA, you mean?

DAVID ALADDIN: I think it’s just, yeah I guess. Is that the same thing?

JOSH BAUERLE: Probably an IRA, individual retirement account. It does have a limit of $5500 per year.

DAVID ALADDIN: That sounds low.

JOSH BAUERLE: Okay.

DAVID ALADDIN: But.

JOSH BAUERLE: So if it’s an IRA you have a limit of $5500 per year. It’s the same type that if you can contribute to a traditional IRA and get a $5500 deduction per year. Right. What this 401K or the Zep does is increases that potentially all the way up to $53,000.

DAVID ALADDIN: Awesome. So, okay. The 401K is huge, so anything else I not know about?

JOSH BAUERLE: That’s the big stuff. I have a… we talked about Entrepreneurs on Fire, I don’t know if you’ve seen but they recently moved to Puerto Rico so if you’re open to moving there’s some huge, huge tax benefits to living in Puerto Rico.

DAVID ALADDIN: What?!

JOSH BAUERLE: Yeah.

DAVID ALADDIN: That sounds ridiculous. Are they making that much cheddar?

JOSH BAUERLE: Flat 4% tax rate.

DAVID ALADDIN: Wow!

JOSH BAUERLE: Instead of, I mean if you’re making millions of dollars per year you’re basically paying 50% taxes, so to keep that down to 4% is pretty big deal.

DAVID ALADDIN: All right. So did he leave US like ex-patriot?

JOSH BAUERLE: No. So that’s the great part about it is you can remain a US citizen because Puerto Rico is a US territory. You vote, you can do everything. It’s the only place in the world where the US says, okay, you can just follow Puerto Rico’s tax rules and you don’t have to follow ours. Basically anywhere else in the world if you’re a US citizen, you could be living in England, or wherever, the IRS still says, too bad, you’re a US citizen; we tax your worldwide income. In Puerto Rico, for whatever reason, they say, follow Puerto Rican tax laws.

DAVID ALADDIN: And the requirement there is you have to be a resident for a year or something?

JOSH BAUERLE: Yeah. So you got to spend more than six months in Puerto Rico and it has to be your main home. So we’ve seen some people try and get around that and keep their California home and just kind of spend part time in Puerto Rico. That’s not going to work. They’re going to look into it and make sure that you’re doing the legit. And there’s also, there’s some big time, you have to get accepted into this program. So this program, this 4% program is only for US businesses who moved their business to Puerto Rico. And your business has to meet certain standards as well, but if you’re making enough money that this start to sound good, then look into this. It’s called Act 20 and Act 22 in Puerto Rico.

DAVID ALADDIN: Everyone’s like writing it down right now.

JOSH BAUERLE: Right. Right. Puerto Rico doesn’t look like the worst place in the world to live either. Some pretty nice stuff there.

DAVID ALADDIN: That’s an awesome tip. Okay, so, all right. My last question is, can you buy like a warehouse and that would take out, that would be all tax deductable from your profits?

JOSH BAUERLE: So it is a tax deduction but this is where we’re going to go back to the Donald Trump conversation. When you buy a large asset like that, basically if you buy any asset that’s over probably $500, you don’t get to deduct that all at once. You have to spread that out over a certain number of years, and how many years depends on what type of asset it is. If we’re talking of warehouse which is commercial real estate, you’re talking 39.5 years that you have to spread that out over.

DAVID ALADDIN: What?!

JOSH BAUERLE: So let’s just say that you bought a warehouse for $39,000 just to make the math easy, you’re going to get a $1000 deduction for 39 years.

DAVID ALADDIN: That’s… I don’t get it. Who came out with that law?

JOSH BAUERLE: It’s the IRS for you.

DAVID ALADDIN: All right. It’s been a pleasure having you on. How can people reach out to you?

JOSH BAUERLE: Yeah, so they can definitely check on our website. We have tons of free resources there. www.CPAonFire.com or just reach out to me directly via email, josh@cpaonfire.com.

DAVID ALADDIN: Awesome. Dude, it has been a pleasure having you on and definitely learned a ton in this episode. I actually am going to have to listen to it again. On my next—

JOSH BAUERLE: Awesome. Thanks for having me. It was fun.

DAVID ALADDIN: Yeah. On my next ride to the gym. Thanks a lot again. David Aladdin, Josh Bauerle, out.

]]>Today’s I’ve got on the show, who is a CPA and the founder of CPA On Fire, a tax and accounting firm specializing in working with online entrepreneurs. Over the last few years he has been working very closely with Amazon FBA and other eCommerce sellers...

What you'll learn:

Can you take us to the beginning before you started your accounting firm, where did your journey begin?What’s the story of how you became the official cpa for entrepreneur on fire?

* How many employees he has
* How Amazon sellers should setup their business.
* How to big sellers legally save a lot of money on taxes
* What’s tax deductible in our e-commerce businesses
* How Donald Trump Saves on Taxes
* Distributions to owners vs. payroll
* Sales tax and set the record straight. Should we paying sales tax to all the states where FBA is at, or just our state tax
* What software tools do you recommend a seller should use. And WHY

And lots more.

Show notes coming soon.

DAVID ALADDIN: Welcome to the show, Josh.

JOSH BAUERLE: Hey. Thanks for having me.

DAVID ALADDIN: So, can you take us at the beginning before you started your accounting firm? Where did your journey begin?

JOSH BAUERLE: Yeah. So I kind of worked in several different accounting fields, I guess I did work at a Fortune 500 company out of college, doing some cost accounting. I moved into public accounting doing taxes for bigger businesses. I did some financial advising and I finally realized that all these jobs weren’t the problem. I kept thinking if I got this new job that would be the job I’d like. But I finally realized that I just didn’t like being an employee so by 2012 I went out and founded my own firm and I started specializing in working with online entrepreneurs and that’s kind of slowly evolved into really working closely with eCommerce sellers and especially Amazon FBA sellers so we got here.

DAVID ALADDIN: How long were you doing the job thing for?

JOSH BAUERLE: I did, let’s see. I did two years out of school at the Fortune 500, I did another two years at a public accounting and then a year at financial advising. About five years.

DAVID ALADDIN: Five years.

JOSH BAUERLE: Yep.

DAVID ALADDIN: So 2007-ish?

JOSH BAUERLE: Yeah. Roughly. Yep.

DAVID ALADDIN: And so when you were like wanted to quit your job was that at that time one of the hardest things to do?

JOSH BAUERLE: Yeah. It kind of came up random. It actually when I was doing the financial advising, the guy I was working for, he wanted to acquire other financial advising firms. And I said, hey, I have my CPA license why don’t we just acquire another CPA firm and we can turn those into financial advising clients. He was all on board for that and we found one that we really liked and he then kind of got cold feet and backed out at the last second and I was like, you know what? I'm still going to go through with it, I'm going to take it over. So I was working with this guy and it was kind of, he was an older guy, he’s looking in to get out of his practice. He basically just let me run the whole practice and I get x’ed him out of the total whole revenue that came in. Then he said, and beside if you want to build your own stuff on the side you can keep all of it. So I started doing that for him while just slowly building my side business and it get to the point where he kind of wasn’t being reasonable for what he want to charge me to buy his, but I felt I've built mine enough that I could finally go out of my own, so.

DAVID ALADDIN: Yes.

]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean49:41AS 89: Inside Nejc operation, 140K Euros/Month – Learning from mistakeshttps://amzsecrets.com/inside-nejc-operation-140k-eurosmonth-learning-mistakes/
Thu, 10 Aug 2017 02:55:33 +0000http://amzsecrets.com/?p=6540https://amzsecrets.com/inside-nejc-operation-140k-eurosmonth-learning-mistakes/#respondhttps://amzsecrets.com/inside-nejc-operation-140k-eurosmonth-learning-mistakes/feed/0Today I’ve got Nedjc Voraic on the show, Nejc is an entrepreneur who started learning selling on Amazon about 1,5 years ago. With help of the knowledge of his mentors, mastermind group and a lot of trial and error, he managed to build a serious business. The beauty of his philosophy is that he does not put much focus on conversion, ranking and listing optimization. He has now scaled to over 140.000 € a month, mostly from selling in Europe.
In this episode you'll learn:
Mistakes Nedjc made and how he pivoted
How much he started with
How he has grown his business
How he scales his business
How to build an amazon business
Tools Nedjc uses
Mentors Nedjc uses
What worked for Nedjc and what didn't
His morning routines
His business strategy
How to source outside of China
Tricks and secrets Nejc uses
And lots more. Transcript coming soon
How to Contact Nedjc:
Mail: nejc87@gmail.com
Facebook: https://www.facebook.com/nejcvolaric
15 min free Skype call where I share our methods 1 on 1 and answer your questions
https://calendly.com/nejcvolaric/15min
DAVID ALADDIN: Great to have you on the show, Nejc.
NEJC VOLARIC: Oh, thank you, David. Thank you. I am really, really honored to be here. I have listened to your podcasts and I have learned a lot and now I have the privilege to be here, to be speaking to you and sharing my knowledge and thank you for having me.
DAVID ALADDIN: Welcome. Can you take us at the beginning before your online success, where did your journey begin?
NEJC VOLARIC: Ah, before the online success? Okay, I can just share a little bit of my background. I have opened a company in 2002, this was after my college. I have a Bachelors Degree in Economics and a Masters Degree in Psychotherapy. I wanted to be a psychotherapist but then I've decided this is not for me and I opened a company and I became a professional photographer. I was shooting mostly weddings and with that business or a job I should say, I started developing a statistical analysis business who does statistical analysis for students and companies. And this was one and a half year ago or maybe a little bit more, I've decided I want to do something more internationally, because statistical analysis business is only for—
DAVID ALADDIN: Right.
NEJC VOLARIC: Slovenia and that’s what I've discovered Amazon, it was a promotion for ASM course and I've seen the results of people who’re getting and I've decided I wanted to give it a try so I outsourced my statistical analysis business completely or hire employees that I've set up systems, and you know, I had a little bit of spare capital and after I outsourced it and set up systems for the business, I had a lot of free time and then the learning process began.
DAVID ALADDIN: Hm. So you went to school for Economics? Looks like that has helped you out a lot and you did the statistical analysis for 13 years, is that correct?
NEJC VOLARIC: Oh, no, no, no… I did this, I mean my staff, my employees are still doing it.
DAVID ALADDIN: Hm.
NEJC VOLARIC: But I've started this in 2013.
DAVID ALADDIN: How many employees do you have doing that business?
NEJC VOLARIC: In that business I have three employees.
DAVID ALADDIN: Very cool. And so compared to the Amazon business that you currently have is it doing better? Worse? What’s that look like?
NEJC VOLARIC: Oh no, it’s not doing as good as Amazon, you know.
DAVID ALADDIN: Yeah.
NEJC VOLARIC: This business brings me a good salary in Slovenia, you know monthly pay, but it’s not something you couldn’t reach from because it’s a micro niche in Slovenia and it’s only Slovenia. Slovenia is a small country with two million people so the business is not as scalable as Amazon, so that’s why I decided I want to go for Amazon because I have reached a peak where I couldn’t progress anymore so I wanted to do a little bit more things...Today I’ve got Nedjc Voraic on the show, Nejc is an entrepreneur who started learning selling on Amazon about 1,5 years ago. With help of the knowledge of his mentors, mastermind group and a lot of trial and error, he managed to build a serious business. The beauty of his philosophy is that he does not put much focus on conversion, ranking and listing optimization. He has now scaled to over 140.000 € a month, mostly from selling in Europe.

NEJC VOLARIC: Oh, thank you, David. Thank you. I am really, really honored to be here. I have listened to your podcasts and I have learned a lot and now I have the privilege to be here, to be speaking to you and sharing my knowledge and thank you for having me.

DAVID ALADDIN: Welcome. Can you take us at the beginning before your online success, where did your journey begin?

NEJC VOLARIC: Ah, before the online success? Okay, I can just share a little bit of my background. I have opened a company in 2002, this was after my college. I have a Bachelors Degree in Economics and a Masters Degree in Psychotherapy. I wanted to be a psychotherapist but then I’ve decided this is not for me and I opened a company and I became a professional photographer. I was shooting mostly weddings and with that business or a job I should say, I started developing a statistical analysis business who does statistical analysis for students and companies. And this was one and a half year ago or maybe a little bit more, I’ve decided I want to do something more internationally, because statistical analysis business is only for—

DAVID ALADDIN: Right.

NEJC VOLARIC: Slovenia and that’s what I’ve discovered Amazon, it was a promotion for ASM course and I’ve seen the results of people who’re getting and I’ve decided I wanted to give it a try so I outsourced my statistical analysis business completely or hire employees that I’ve set up systems, and you know, I had a little bit of spare capital and after I outsourced it and set up systems for the business, I had a lot of free time and then the learning process began.

DAVID ALADDIN: Hm. So you went to school for Economics? Looks like that has helped you out a lot and you did the statistical analysis for 13 years, is that correct?

DAVID ALADDIN: Very cool. And so compared to the Amazon business that you currently have is it doing better? Worse? What’s that look like?

NEJC VOLARIC: Oh no, it’s not doing as good as Amazon, you know.

DAVID ALADDIN: Yeah.

NEJC VOLARIC: This business brings me a good salary in Slovenia, you know monthly pay, but it’s not something you couldn’t reach from because it’s a micro niche in Slovenia and it’s only Slovenia. Slovenia is a small country with two million people so the business is not as scalable as Amazon, so that’s why I decided I want to go for Amazon because I have reached a peak where I couldn’t progress anymore so I wanted to do a little bit more things, a little bit more internationally and I had bigger goals, so.

DAVID ALADDIN: So, these employees, did they help you out on your Amazon side or do you keep them separate?

NEJC VOLARIC: No, it’s all separate. It’s separate.

DAVID ALADDIN: Beautiful. All right. So let’s talk about the Amazon side. What—how did you get in to it? Why?

NEJC VOLARIC: Yeah. This is an interesting story. I began with the ASM Course. This was at the end of 2015 and I did what they said and I sourced my product from China, I did my research, I found a product on Amazon and actually as detail oriented and perfectionist as I was, I was sourcing this product for three months, it was a kitchen knife and I wanted you know. I was reading reviews from the competitors; I wanted the best metal with a lot of carbon so it doesn’t get dull easily, and all of the other stuff. So it took me a lot. A lot of time to go back and forth with the Chinese to produce the best knife for me and I’ve invested, I think it was 5000€ for 500 knives and I—then I started selling at the beginning of 2016, so last year, and I found out that the thing is not selling.

DAVID ALADDIN: Oh, Jesus.

NEJC VOLARIC: And something must be wrong with it, so this was my Amazon fail I could say and this is when I started questioning the whole model of what the course of what on line is teaching. And I thought to myself if everybody is doing the same thing, and when everybody is doing the same thing it usually loses power, so that’s when I stumbled on one of my mentors who was Will Tjernlund.

He was talking about the methods that we’re totally the opposite of what everyone was saying. He was not focusing on reviews, on the ranking, and everything. And I’ve met some other mentors too here in Slovenia who made millions on Amazon here in Europe. And when I got in contact with them I saw that they were, I mean that they were equally not focusing as much on constant optimization, ranking, and everything. So at that point I started launching multiple products at a time just to test. And from China I ordered anywhere from 10-30 pieces of generic white labeled product and I’ve said to the guy from Alibaba, send me just 30 pieces or 20 pieces.

I don’t need my logo on it you can pick it off from the shelf, I mean it could be generic, it could be from your stock, I don’t even mind the color, just send it to me, and when this market test will be successful, if it will be, we’ll order more from you, but right now we cannot and with most of them I could made a deal like that, and I started rapidly testing and launching new products. And what I found out is that some of the products, we would just put on Amazon with 30-60 minutes work of setting up the listing with some generic photos from Alibaba from their site, and some of them started selling with only three reviews and they were all three or four stars and I thought to myself, okay. I mean what’s the deal here?

And I figured out that polishing the listing, focusing on conversion, making promotion of course it does work, but if the product by itself is in a good niche with not a lot of competition and huge demand, this by itself is a huge opportunity and the only way you could know if the product will be selling or not, is by testing it with, test it with smaller quantities. And I found out that this was the right way for me because in my opinion, Jungle Scout or the other discovery tools or tools that show you numbers, do only in my opinion 30% of the story or maybe less. Because there are so many variables besides the thing you see on Jungle Scout that you just don’t know and you cannot predict because every product is special, it’s in a different niche, it has different sex that will buy this product, different age group, they have different interest, they have different mentality, and with one product the reviews will be highly important, contrary to the another product where reviews will not have any importance at all.

So this was the start of my success with connecting with mentors and when I started to think the opposite way of what everyone is doing, and this is actually the 80/20 rule. We spent 20% of the time for the 80% of the result. We don’t want the listing to be a 100%. We don’t want it to be a 100% because if it will be, we would spend 80% of the time to perfect the listing from 80%-100% so this is actually our mentality, our way of looking at things. And we have a lot of SKUs and we test a lot and we have made great, great progress and incredible results here in Europe.

DAVID ALADDIN: How many SKUs are you currently up?

NEJC VOLARIC: We have around 100 and 1300 SKUs.

DAVID ALADDIN: Oh, my god.

NEJC VOLARIC: But you know around 80 SKUs are selling.

DAVID ALADDIN: Yeah.

NEJC VOLARIC: So, most of the SKUs, it’s again the 80/20 rule. Most of the SKUs are not selling and out of that 80 SKUs that are selling, we have again 20% of them who are selling really, really well.

DAVID ALADDIN: Mm-hm.

NEJC VOLARIC: But we haven’t put as much effort in them as we would if we would go by the principle that everyone is saying: you should polish the listing, you should test everything, you should focus on ranking; this was all organic, you know. And we have some products that are best sellers that are ranked first under the main keyword, but this was not something, I mean we do, I would say 80/20 optimization. We do optimize, we have a system for finding out keywords but we only find you know up to 20 keywords because we know that all of the effort that we will spend after those 20 keywords will only bring us 20% of the result.

So we try to use our energy and our time as efficiently as possible and you know those product that are selling really well came to the first place of the search engine organically because they were good products and reviews, they just came because people were so happy with the product that they left us reviews and you know all of the things they have naturally—the listing was optimized, of course, but we didn’t spend two days to optimize it. We spend through our systems that we have in our company, we spend maybe two hours.

DAVID ALADDIN: I’m actually very impressed that you didn’t give up after you lost that first was it five or eight thousand dollars? Certainly, it’s a pretty hard blow it, like just starting out of the game like this Amazon thing sucks!

NEJC VOLARIC: Yeah. I think most people would do that.

DAVID ALADDIN: Excuse me. And you just have like this persistence and you totally search up your business model, and you went kind of like the wide spread approach into Amazon launching as many SUKs as possible PVC so that—I find that very interesting. I take a completely different approach which works too but… So 80 out of you said a thousand SKUs are launched? That is like a 10% rule.

NEJC VOLARIC: Yeah, in my eyes, maybe a little bit about 10%, but you have to know that we have listed 1000 products that are bearings, all kinds of bearings from a brand that gave us a file—

DAVID ALADDIN: Awesome.

NEJC VOLARIC: An excel file.

DAVID ALADDIN: Yeah.

NEJC VOLARIC: And we essentially, we did some optimization but it wasn’t optimization in bulk. They were 10 different bearings with all of different variations. They were 10 different bearings and we have optimized the keywords for a hundred bearings, and a hundred bearings, and a hundred bearings at a time. And essentially, we didn’t have as much, I mean we didn’t have much word because we uploaded it to Amazon and we have systems for everything. I wanted to build a company that had systems that had a machine build up with different parts so we can just throw new products in this machine and the machine would do its work.

So I’m now at that point where we can do that. We can just keep adding products and when we add a product, a whole set of systems triggers, and the end result is after one month where we find out if the product is selling or if it’s not selling, if it’s selling we make a reorder, if it’s not selling we just, I mean we lower the price and we get rid of the product. So this is a little bit a different approach but it’s really, really, really scalable approach. Because there’s no limit to what you can… to how much you can sell and one other thing I have to mention is that we, most of our revenues and most of our products do not come from China. Do not—they’re all, they’re most of them are European brands.

DAVID ALADDIN: Let’s go more into your systems like can you break that down? Let’s say you find a product that you sourced, how’s this product go through your systems?

NEJC VOLARIC: We have found a product for example, I was on a meeting with our potential partner, and with that partner we make a deal, I mean we say to them we can sell your products in Germany, in the UK, in Spain, France, Italy; but we need to test the market first so I suggest a deal where you give us five units or ten units depending on the price of each product for free. This obviously you cannot do with the bigger brands but with the smaller brands you can. You give us a few specially if they’re not on Amazon, I mean only if they’re not on Amazon, and they gave us a few products for free to test and I say to them this is your investment, our investment would be investment of our time to put them on Amazon and our knowledge and that’s it.

DAVID ALADDIN: Wow.

NEJC VOLARIC: And we put the product on Amazon, and then we turn on the PPC and see what it does. And sometimes the product would start selling immediately and sometimes it will not sell, and in terms of you know PPC we have our own software, it’s called Timesence[Ph], and this software basically goes to the search term report and finds key words that have ten clicks or less just to you know get enough of a sample and the products that have search terms that have ten clicks or less and an ACOs anywhere above 16% or 20%, those search terms go into negative exact so we don’t want to lose money on PPC.

DAVID ALADDIN: Hm. Yeah.

NEJC VOLARIC: And this works well for us.

DAVID ALADDIN: So if it’s greater than 20% ACOs, you like kick them out, but if it’s less than 20% you keep them?

NEJC VOLARIC: Yeah, we keep them. But it’s still, I mean it depends because you know margins are different on every product.

DAVID ALADDIN: Very true.

NEJC VOLARIC: But this would be a general rule and we we’re paying I think it was 2.5€ per product sold a few months ago and we had this limit set up on I think it was 15 clicks and 30% ACOs and we have lowered it down to I think it was 12 clicks and now 10 clicks, the ACOs went down to 16%. And what we found out that we have lowered our average, lowered our PPC per unit sold from 2.5€ to 1€ and you would think that we would sell less but we’ve sold a lot more. I don’t say this is the only factor that triggered this, but I think but I’m sure I’m a 100% sure that it is one of the factors that we did, because if you look at it we didn’t spend money on clicks and on the keywords that didn’t bring us money, and so people were not clicking on the products and not buying, so our average conversion went up and just maybe our Amazon algorithm pushed us a little bit higher. This is just my theory, I don’t know. It’s maybe— It’s something I could get opinion from you about. Maybe you could—

DAVID ALADDIN: Yeah, so for me like, I just like one myself, like my conversion cost, could be like 50% when I first launched a product basically because I do a different approach, I buy like 2000 or 3000 units at once for new SKU and at this point like for me, I’ve created a brand and it helps sold our new products which means like I don’t need reviews actually to sell a product. I feel like the customers coming in expect a certain quality when they visit my brand page, so but the 50% ACOs, I know that ACOs will actually decrease as I get more reviews because if you have zero reviews your ACOs is going to be a lot higher so that initial ACOs so I feel like—so when you get less than 20%, with almost 0 reviews, that’s awesome. You might actually have a bunch of killer products in that other 900 SKUs that you have. So like if I was in your situation I would actually even pump more PPCs into those 900 other SKUs and to see what happens because if you get some reviews on a few of those that could totally change the dynamic of the ACOs. Reviews are pretty interesting how it affects conversion rate like significantly like the more you get to but—

NEJC VOLARIC: Interesting.

DAVID ALADDIN: But yeah, so that might be why your ACOs are kind of fluctuating and changing but it’s a hard metric to actually understand like from just a data point without seeing the actual what’s going on in the listing and your competitors so, what are like—

NEJC VOLARIC: Yeah—

DAVID ALADDIN: Go ahead.

NEJC VOLARIC: It’s a different, yeah it’s a totally different approach, it’s sort of and we intentionally do not want to deal with details.

DAVID ALADDIN: Yeah.

NEJC VOLARIC: We just don’t want details, we want a lot of products, we want systems and this,. I mean this, I tried it both ways. But maybe in the first method I wasn’t persistent enough, I don’t know. This method seems easy, the easiest to me. And you know I’ve learned this from people who are doing anywhere from three to twenty million.

DAVID ALADDIN: Yeah.

NEJC VOLARIC: And they all said the same thing and I said, okay. If they are telling me this, and if they are doing it this way, then I think, then they must be the right way.

DAVID ALADDIN: Yeah. I had Will on the show and at that time that’s about a year ago… a year and half ago, he was doing 6-7 million, and his inventory turnover was really fast so he just keep replenishing them the inventory based on—

NEJC VOLARIC: Oh, David, yeah. This is one other thing why we have left China behind and Chinese products because of the inventory turnover time. Even though the return of investment may be, but it’s not necessary, it may be its still, there is no general rule if you are going to be selling European brands that you’ll have a smaller profit. I mean, this is just generalizing. We have products, who we have I mean very good return on investment even though they’re from Europe because they are higher priced and some other factors. They are small because they are cosmetics, blah, blah, blah. And the inventory turnovers this is really, really, important concept I think that most people don’t understand. Because if you’re sourcing from China you can flip your inventory maybe four times a year.

But we flip our inventory 12x a year because we only order 30 days of stock and the lead times are shorter, this is what Will, and all of the other mentors I had were constantly talking about, and what I did then? I did the math. And the math showed me that I could grow so much quicker with short inventory times and this is, I mean this incomparable. This is really, really, crazy and it’s a really, really important concept.

DAVID ALADDIN: Now I’m jealous of that like that advantage. Eight times a year for China would be like kind of awesome. I think did you say 4x or 8x? I feel like the turnaround time maybe three months of… yeah there’s about 4x a planner cycle.

NEJC VOLARIC: Yeah.

DAVID ALADDIN: And so you’re putting a lot more money into your inventory that takes longer to replenish. So what about your inventory? Do you guys have like a storage warehouse? How do you receive all these inventory? Usually and a lot of times, our suppliers ship it directly to Amazon because I have personal relationship with them.

DAVID ALADDIN: That’s awesome.

NEJC VOLARIC: They are some of them are based here in Slovenia. They are becoming my friends now and there’s no problem for them to ship it on Amazon. Actually we tried to deal with them, they even pay for the shipping to the Amazon and on the contrary we take all the refunds. This is one deal we make with them. And we have a small storage because we send a couple of units from our own stocks so we’re doing FBM just for testing. Some of the stuff we are… the brands sends to us and we sell to Amazon or we send to Amazon but most of the times the stuff goes directly to Amazon warehouse, in Italy or in Germany or in the UK.

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Okay. So what tasks in your business have you outsourced? Which one did you not do anymore?

NEJC VOLARIC: This is funny. This is the great part of it you know because when you hire your first employee, your world turns because you can make so much more than you did before that it’s incomparable. Mostly based on two factors because the employee can do the work and frees up your time and another more important factor that you can focus on more important tasks that have doubled the out compared to the ones that are unimportant like listing products, searching for keywords. So the impact is doubled or tripled. So and I firmly believed that building a team on site, not hiring virtual employees.

It’s very, very, crucial and after maybe six months, if somebody became an expert in their field, they can do stuff from home. I mean I don’t mind as long as the results are there but in the first few months, at least in the first six months they have to be on site to communicate with the team because the information flow and the learning curve is so much better in this case and so now that I have a team of employees, one of them is doing listing, one of them is doing reordering, one of them is searching for new suppliers, talking about the terms and the contract and everything.

And they also do accounting. And what I’ve… and in the beginning when you have to set these things up and when you have to set the system, set the rules of the game, it’s very, very, intense and very, very, stressful. Because you get a ton of questions from them and they do not know where to start. But once you invest your energy and giving away the information and learning them, and giving away the tasks you know, you only do it one time and then you don’t have to do it another 99 times. This is the beauty of it. And I have done a stop, I have written a stop doing list of things I stop, I actually should stop doing that somebody else can do instead. And I have forwarded all the emails from Amazon to a certain employee I have if somebody, if some partner calls me, we need to figure out this and that, I say from now on my employee this and this is responsible for this.

I think you should just contact her and in the future too in case of these situations and you deal with them you know. And if they have some questions they can always ask me so that way I went from 50 emails per day to five emails per day. And I freed a lot of my time and, but you have to have systems, you have to have weekly meetings, you have to have weekly goals, you have to have monthly meetings monthly goals… basically you have to set the rule of your own game. And what helped me with that a lot just to get ideas of how to set up a system because in the beginning it’s very, very, hard because it’s all new to you. What helped me a lot was a book called, E-Myth.

This was one thing but the most of the value I got was from our Mastermind group, I formed one and a half year ago. Those are all local guys here. Some of them are on Amazon, some of them are not. I met them in all kinds of seminars, they were friends of my friends, and I’ve assembled this Mastermind and we are meeting regularly every 14 days and we are growing together. They have employees, they are growing. I mean we help each other because I have some ideas for them and they have some ideas for me and once you set the rules of the game for the company and for your employees, the thing gets really, really, it’s really, really easy. I mean I hope, I mean I think I hope it was not too general of an answer. If you would need some more information about certain areas I mean you are free to…

DAVID ALADDIN: Now, so what are… all right I guess the better way to reframe this, what do you do now?

NEJC VOLARIC: What do I do? I hire new people.

DAVID ALADDIN: There you are.

NEJC VOLARIC: I run meetings still.

DAVID ALADDIN: What do your employees go for in Slovenia? Like I feel like one of the biggest things I kind of don’t want to get into is having employees and I’d rather contracted them all out through like Freelancers that work full time? Mainly because I’d had to have like an office and to have these employees. In the US there’s always like benefits that you have to pay, like health insurance and it’s insane. So that’s—

NEJC VOLARIC: But yeah. But if you look at it the other way, they are more loyal to you they, you are, essentially they are more loyal to you because you provide them work and they are more dependent on them they’re dependent on you on the other hand you are dependent on them. It’s always a mutual relationship. So you have some other benefits as well but, yeah.

DAVID ALADDIN: Maybe Slovenia workers are better than American workers.

NEJC VOLARIC: You know you have to be aware of one thing that Slovenia is a lot cheaper than America, so the work force is cheaper and this is the advantage that we have is to lower cost of leaving, lower rents for the offices and for the apartments and lower wages, lower salaries. And we can sell in the US and we can sell in Germany where the prices are of goods are higher and that way you know it’s—we have a certain advantage because of that.

DAVID ALADDIN: I’d probably going to move there in the next month or so.

NEJC VOLARIC: Oh, really you can come. You are always welcome. I can show you all the sights in Slovenia. You can sleep at my place. We’ll go to Bled, we’ll go to Postojna Cave and you’ll see the beauties—

DAVID ALADDIN: Thank you very much. I’m actually going to try to in September. So it’s not that very close though… So what struggles do you face now that—what do you worry about? What keeps you up at night?

NEJC VOLARIC: Hm. What I’m going to do with the money? No, no. Just joking. No but what keeps me up at night? I think less and less things because my goal is to hire a director who will run the business or who’ll takeover of what I do now so I can focus on teaching because I love to do teaching. I love to learn and I love to teach. And I also mentor some people. I give them knowledge about the Amazon business and this is really, really my passion because I figured out that it is a lot of stress being a manager if you are not doing that with all your heart. If you’re not enjoying the things you are doing. And I do not enjoy 100% that’s why I’m going to train a manager who would run things for me and they would do it with all their heart and I could focus on things that I would do all my heart, and this is teaching. Are you familiar with, I don’t want to make a commercial here, I don’t know if I can do it but.

DAVID ALADDIN: Yeah. Go ahead.

NEJC VOLARIC: There’s a European private label Summit in, this is actually an online event that and I have been invited to speak there, and you know there is not a lot of information on line in about selling in Europe and this is a great event for European sellers. I am not saying this because I have been invited to speak there, I’m saying this because I bought the thing last year, and it brought a lot of value for me. Because Europe is a little bit more complicated in terms of texts and you have to be vat registered in each of the country. You know—

DAVID ALADDIN: Yeah.

NEJC VOLARIC: Registered for the value added tax. So it’s a little bit more complex. But once you learned those things it’s easy so…

DAVID ALADDIN: Very cool. When does the summit usually take place?

NEJC VOLARIC: This summit it starts on 23rd of August, I’ll send you the link there. Will is a guest there as well. He was doing something in Germany, I don’t know exactly I just saw his—

DAVID ALADDIN: I don’t know… I feel like Will is everywhere. He is like always working. I don’t know how he gets time to do it.

NEJC VOLARIC: He’s a fearless guy and what I admire about him is the mindset because he says, fake it until you make it. And he just talks and he’s very, very, intelligent. I admire him so much and he has given me so much that I mention him everywhere.

DAVID ALADDIN: So you mentioned that you practiced daily gratitude, can you go more into that?

NEJC VOLARIC: I mentioned this?

DAVID ALADDIN: Yeah. Actually it was something you emailed me.

NEJC VOLARIC: Oh, I emailed you. Yes so this is one of the keys I think into life in general. If I could say one thing about mindset, is practicing the daily gratitude. When I wake up I have a gratitude ritual. I have a diary where I daily, without any, I mean daily even in Saturdays and Sundays, I take 15 minutes and I write with my hand things that I’m grateful for. So I’m grateful for my food for example, I’m grateful for my business. I’m grateful that I feel good. You know all of the things that you’re grateful from all of your heart and this triggers your subconscious mind to be focused on wealth because wealth is what you have and if you’re focused on wealth, you’ll have more of the wealth if you want. I mean it can be money, it can be all the other stuff, but I think the real wealth is not money, but is you feeling good most of the time and I think the gratitude is a big part of it because you can have 100 million and if your focus is on I need to have 101 million, your focus is on lack because you always lack something. And if you feel focus is on lack, you are unhappy because you think you don’t have a lot.

But if you’re on the other hand try to focus on gratitude; helping people, smiling to people, accepting to people. Be grateful for the situation that you are in, that you are able to live in a part of a world that is developed. That you can work behind a computer on an air-conditioning and stuff like that your mind and your subconscious will be triggered and your mind will be focused on wealth because this is what you have. And I think the real happiness is not in money although you have something, you have to do something in life, but its more about the mind and the mindset and how you trained your mind everyday like a muscle and if you do this you know for 30 days, you’ll find profound differences.

DAVID ALADDIN: Feel like I triggered one of my favorite conversations. It’s not even intentional. And I can see how you love to teach coz I like listening that whole entire statement you said on gratitude and creating… so is this diary based completely on gratitude? Or is there everything in there?

NEJC VOLARIC: The first part is gratitude and the second part is basically affirmations. So you could call it praying, you know. Praying. What do you want out of life, I mean all of the things you just want. I mean affirmations all of the wishes all of the goals you have. So for example, I focus on money as well as on what I think is the most important. On feeling and I stayed. I feel security, I feel courage, I feel humbleness and all of that stuff. And when you do this daily, you essentially brainwash yourself and you grow it like a muscle. And after 30 days, your life will start to change because you’ll start to notice all of those things that you are thankful for and that you wished for in your life everywhere and this is the real power.

One thing I do which is I think is really important is I meditate everyday for 15 minutes and around 12 o’clock or 1 o’clock in the middle of my work day I go into ,my car, I drive to a nearby woods and I take 15 minutes off and I meditate and I think it works wonders for me.

DAVID ALADDIN: Wow. That’s awesome.

NEJC VOLARIC: So these are some of the things that I discovered because I was too much focused on money even a few months ago. Now of course I enjoy what I do and I’m very thankful for this opportunity to be speaking to you, to sharing the knowledge and to be doing the things on Amazon and getting the results I’m getting and we’re getting but the real thing is you have to train your mind, this is the real value, because if you lose everything, your mind will still stay there.

DAVID ALADDIN: Feel like you should be like an inspirational motivational teacher.

NEJC VOLARIC: Ah, thank you. Thank you, David.

DAVID ALADDIN: The main, you know, entrepreneurs like… it all comes on to the core and so the form on it like we’ve got to set our course straight so everything you’ve been saying try the meditation I like it. I get so angry just sitting in one spot. Think the most I can do is 10 minutes and my mind tends to drift everywhere and I’m sure a lot of the listeners are like, you too?

NEJC VOLARIC: You know, David, you don’t have to do meditation. This is the part where I think most of the people are doing it wrong. They are trying to meditate. You don’t try to meditate because meditation is essentially being and when you go to the woods or you go to a quiet place and you close your eyes, you just are and this is the real meditation and of course during the first few days your mind will start to wander, I mean your mind will wander around and you’ll have all kinds of different thoughts, but after some time your mind will quiet down. And meditation, you don’t have to try meditation. You don’t do meditation because you want to achieve something.

You do mediation jut to connect with the source to connect with the real energy of where you came from at birth, when you were conceived from nothing. I mean you were conceived from nothing and this is a real miracle and when you sit in meditation and you close your eyes and you hear the nothingness, you are connected to the source and this is the real meditation when you just are, you don’t have to do anything you just quieted down and you just listen to the silence. Although this might, it might seem strange what I’m saying, but this is I think this is the way, I mean this is the key because I have tried to meditate, I have tried very hard and I quit after 14 days, but now I’m meditating everyday and I just sit in the silence and listen to the silence, listen to the nature and I try to feel it and this is it.

NEJC VOLARIC: My morning routine its gratitude, affirmations, and then this is about half an hour then I eat my breakfast and then I read every day for one hour.

DAVID ALADDIN: Dang.

NEJC VOLARIC: This is it.

DAVID ALADDIN: You have patience, sir. Like I tend to listen to a podcast coz I can just clean the house when I’m listening. I can’t read a book while I’m cleaning the house, so, for me like, so I’ve taught myself mostly everything to just like podcasting like listening to awesome podcasters . It’s kind of what got me into Amazon as well and entrepreneurship too. Like so you do 30 minutes of affirmations, gratitude and then you’ll read for about an hour, do you wake up really early or you could tend to just like sleep until when you want?

NEJC VOLARIC: I wake up at 5:30.

DAVID ALADDIN: Okay. That’s really early.

NEJC VOLARIC: Yeah. I wake up at 5:30, at 7:00 I start reading and at 8:00 I’ll start working.

DAVID ALADDIN: What time do you go to bed?

NEJC VOLARIC: I try to sleep more than six hours. I go to bed at I think 11:00 is the latest time I go to bed but I try to go at 10:00.

DAVID ALADDIN: I’m going to pivot really… I know we got about 10 minutes left, actually less than that. One thing we didn’t cover was where do you source since you don’t do in China anymore?

NEJC VOLARIC: Yeah. So I have met best partners in a fair, so the fairs are great I think because you see the stuff that you sometimes do not even think about and you make a list of them. Maybe you make photos of them and then you check online if you see if there’s an opportunity. You check them on Amazon or you can send them to your employees and they check it for you and this is one’s… I mean… there’s not one way. Sometimes I see some interesting stuff in the retail store or in the, I don’t know what store is in the sporting… I don’t know store that sells sporting goods or toys or anything, and I see, okay, this is an interesting product let’s check it out on Amazon.

This is one thing and the other way is people are contacting us now because partners talk with their friends who are also business owners, and they see what results we got, I mean what results they got when they started collaborating with us. This is also not, I mean this is also of course not a general rule, because some of them are not happy because we cannot sell their products on Amazon because there isn’t just opportunity but the ones that are happy, that we sell a lot of their stuff off, they recommend us to their context and they call us you know.

DAVID ALADDIN: That makes sense, yeah.

NEJC VOLARIC: So this is one way. Sometimes we buy from several brands inside one niche, for example we find out through a market task that a certain brand of this and this is selling really well, so we say okay obviously this market is good so we need to find some other brands that are selling the same stuff and we need to buy from them as well so to gain a little bit more of the market share.

DAVID ALADDIN: Yeah, actually I’ve noticed that UK sellers, they tend to look at, this might be another strategy like they tend to look like they’re American sellers what they’re doing, American brands and they’ll try to source from across the ocean and add those products to the UK markets which most of the time don’t exist yet. Those brands aren’t there.

NEJC VOLARIC: Yeah. This could be one interesting way of doing outsourcing, yeah.

DAVID ALADDIN: Very cool. I think we’re just about out of the time, how can people contact you?

NEJC VOLARIC: As I said I can focus more time now on teaching and gaining my knowledge. I’ve also, I mean, I believe in courses, I think courses are great. And I believe in blogs, podcasts, and groups are great. But if you want to go to the next level, I think they are great for basics. But I mean, yeah, for basics. And I know some people have succeeded without mentors, but my experience shows that when I got connected to my mentors that my successes skyrocketed because you have the knowledge that was not available publicly, and on the other hand you had support and the relationship with that person. And I believe that one mentorship is the key to high level success.

And I’ve got… I contribute, could contribute a lot of my success to one on one mentorship and that’s why that’s what I do with all my heart and I want to based on what I got and what I’ve learned in terms of you know the mindset that I got and all of the other strategies setting on Amazon and I want to teach other people about it and I’m doing. I have developed, actually I have developed in the past week or so a mentorship program that’s I can learn from the first step to the last step but I would say that it is more tailored to the sellers in Europe because we have most of our success here so they can contact me on my email, I think maybe, David you can put it in the show notes.

DAVID ALADDIN: Mm-hm.

NEJC VOLARIC: They can contact me on my email, or Facebook. I mean I’m available for a free 15 minutes Skype call where I share my knowledge one on one and I learn about the person on the other side and see how and if I may be able to help and that’s when, I mean we can I can help them with just one hour just to share on my knowledge or I can help them with the whole mentorship program. Then it’s up to them. I mean I’m not forcing anyone to you know, to pick a package or something so that’s it. I think the 15 minute call and my email and Facebook, David will put on the show notes and that’s it.

DAVID ALADDIN: Awesome. Thank you for coming on. His email and all his contact information will be in episode 89 AmzSecrets.com/89. Thanks for coming on the show Nejc. David Aladdin, Nejc Volaric. Out.

]]>Today I’ve got Nedjc Voraic on the show, Nejc is an entrepreneur who started learning selling on Amazon about 1,5 years ago. With help of the knowledge of his mentors, mastermind group and a lot of trial and error,

In this episode you'll learn:

* Mistakes Nedjc made and how he pivoted
* How much he started with
* How he has grown his business
* How he scales his business
* How to build an amazon business
* Tools Nedjc uses
* Mentors Nedjc uses
* What worked for Nedjc and what didn't
* His morning routines
* His business strategy
* How to source outside of China
* Tricks and secrets Nejc uses

NEJC VOLARIC: Oh, thank you, David. Thank you. I am really, really honored to be here. I have listened to your podcasts and I have learned a lot and now I have the privilege to be here, to be speaking to you and sharing my knowledge and thank you for having me.

DAVID ALADDIN: Welcome. Can you take us at the beginning before your online success, where did your journey begin?

NEJC VOLARIC: Ah, before the online success? Okay, I can just share a little bit of my background. I have opened a company in 2002, this was after my college. I have a Bachelors Degree in Economics and a Masters Degree in Psychotherapy. I wanted to be a psychotherapist but then I've decided this is not for me and I opened a company and I became a professional photographer. I was shooting mostly weddings and with that business or a job I should say, I started developing a statistical analysis business who does statistical analysis for students and companies. And this was one and a half year ago or maybe a little bit more, I've decided I want to do something more internationally, because statistical analysis business is only for—

DAVID ALADDIN: Right.

NEJC VOLARIC: Slovenia and that’s what I've discovered Amazon, it was a promotion for ASM course and I've seen the results of people who’re getting and I've decided I wanted to give it a try so I outsourced my statistical analysis business completely or hire employees that I've set up systems, and you know, I had a little bit of spare capital and after I outsourced it and set up systems for the business, I had a lot of free time and then the learning process began.

DAVID ALADDIN: Hm. So you went to school for Economics? Looks like that has helped you out a lot and you did the statistical analysis for 13 years, is that correct?

DAVID ALADDIN: Very cool. And so compared to the Amazon business that you currently have is it doing better? Worse? What’s that look like?

NEJC VOLARIC: Oh no,]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean55:17AS 88: Inside the mind of Kevin King who’s pulled 3 Million so far selling on Amazon FBAhttps://amzsecrets.com/inside-mind-kevin-king-whos-pulled-3-million-far-selling-amazon-fba/
Wed, 31 May 2017 20:09:04 +0000http://amzsecrets.com/?p=6287https://amzsecrets.com/inside-mind-kevin-king-whos-pulled-3-million-far-selling-amazon-fba/#respondhttps://amzsecrets.com/inside-mind-kevin-king-whos-pulled-3-million-far-selling-amazon-fba/feed/0Kevin has been an entrepreneur his entire life. It's been 30 years since he last received a paycheck from someone else. He has created, developed and guided hundreds of products from inception to market. In 2015, he started five private label brands on Amazon. Together those brands have grossed more than $3,000,000.00. His goal is to reach $4,000,000.00 per year on Amazon alone by the end of 2017.
In this episode, you'll learn:
How Kevin pulls 3 Million+ sales a year
How Kevin picks his products
Types of products Kevin has had success and failed with
What most sellers do and what not to do
How Kevin uses tools, strategies and knowledge to grow his business
How he is expanding outside of Amazon
Inner workings of his business, his execution and mindset
Why he has 5 brands
How he markets his products
What he did before selling on Amazon and e-Commerce
How he creates molds for products
How much he started with
And much more! Stay tuned for transcript
Notable notes:
Link for how to add two products to cart:
https://www.amazon.com/gp/aws/cart/add.html?ASIN.1=XXXXX&Quantity.1=1&ASIN.2=XXXXX&Quantity.2=1
DAVID ALADDIN: Great to have you on the show, Kevin!
KEVIN KING: Glad to be here, man!
DAVID ALADDIN: Can you take us to the beginning before your first million, before Amazon? Where did it all begin?
KEVIN KING: Well, like you said at intro there, I’ve been an entrepreneur my entire life. I think the last time I got a paycheck from someone I was like 17years old, and that was about thirty years ago. So, (inaudible) back when e-mail first started, so I’ve been involved in this for a long time running several different sites, e-commerce sites, fulfillment stuff. So, the Amazon stuff. I’ve been actually selling on Amazon for 12years. I was actually using Amazon almost like e-Bay in the beginning where I would just…I would be one of those high jackers.
If I had something, some old DVD player, or something laying around the house that I was like just throwing it up on e-Bay, sometimes I would throw it up on Amazon, just jump on somebody’s listing and sold it as used. And then I’ve been also doing some wholesale to Amazon through the Amazon Advantage Program which is their program for DVDs, books and that kind of thing, and so audio tapes and stuff, it’s like a special program. So, I’ve been doing wholesale with them for almost 20years on a line of calendars that I do, it’s seasonal product.
So, it’s almost like vendor central, but they issue purchase orders and then we ship them in. But then I started the private label stuff on Amazon in 2015 and like everybody else, I think I saw one of those AMS adds come across my e-mail. I was like "this looks interesting". So, I took a look at it, but…and then I said: “you know, I don’t need to take the course, I already kind of have this background, let me just jump right into it and do it”. And I started listening podcast and researching everything I could, and that’s where it went from there.
DAVID ALADDIN: In 1997 you’ve started, kind of -ish?
KEVIN KING: Yeah, ’95 I think it’s when I when I’ve sent my first e-mail. And I started my first selling online, first e-commerce sight, I think ’96/’97. It was in fact before there was a PayPal even, you know, people had to like…I think I used plug n pay or something back then. It’s still around today, but there were the first guys to actually take credit cards online. So, yeah, I go back. And I think Amazon was…I haven’t looked. I have daily withdraws on my Amazon account, so I am one of the…so, it’s an old school account, so I think maybe ’99 or 2000 probably is when I did my first Amazon stuff.
DAVID ALADDIN: Do you know why they removed daily withdraws?
KEVIN KING: I have no idea. Someone told me they took it away in like 2011/2012, and so any accounts after that. But it probably had to do with…I mean, you know, just protect themselves against returns, I mean,Kevin has been an entrepreneur his entire life. It’s been 30 years since he last received a paycheck from someone else. He has created, developed and guided hundreds of products from inception to market. In 2015, he started five private label brands on Amazon. Together those brands have grossed more than $3,000,000.00. His goal is to reach $4,000,000.00 per year on Amazon alone by the end of 2017.

In this episode, you’ll learn:

How Kevin pulls 3 Million+ sales a year

How Kevin picks his products

Types of products Kevin has had success and failed with

What most sellers do and what not to do

How Kevin uses tools, strategies and knowledge to grow his business

How he is expanding outside of Amazon

Inner workings of his business, his execution and mindset

Why he has 5 brands

How he markets his products

What he did before selling on Amazon and e-Commerce

How he creates molds for products

How much he started with

And much more! Stay tuned for transcript

Notable notes:

Link for how to add two products to cart:
https://www.amazon.com/gp/aws/cart/add.html?ASIN.1=XXXXX&Quantity.1=1&ASIN.2=XXXXX&Quantity.2=1

DAVID ALADDIN: Great to have you on the show, Kevin!

KEVIN KING: Glad to be here, man!

DAVID ALADDIN: Can you take us to the beginning before your first million, before Amazon? Where did it all begin?

KEVIN KING: Well, like you said at intro there, I’ve been an entrepreneur my entire life. I think the last time I got a paycheck from someone I was like 17years old, and that was about thirty years ago. So, (inaudible) back when e-mail first started, so I’ve been involved in this for a long time running several different sites, e-commerce sites, fulfillment stuff. So, the Amazon stuff. I’ve been actually selling on Amazon for 12years. I was actually using Amazon almost like e-Bay in the beginning where I would just…I would be one of those high jackers.

If I had something, some old DVD player, or something laying around the house that I was like just throwing it up on e-Bay, sometimes I would throw it up on Amazon, just jump on somebody’s listing and sold it as used. And then I’ve been also doing some wholesale to Amazon through the Amazon Advantage Program which is their program for DVDs, books and that kind of thing, and so audio tapes and stuff, it’s like a special program. So, I’ve been doing wholesale with them for almost 20years on a line of calendars that I do, it’s seasonal product.

So, it’s almost like vendor central, but they issue purchase orders and then we ship them in. But then I started the private label stuff on Amazon in 2015 and like everybody else, I think I saw one of those AMS adds come across my e-mail. I was like “this looks interesting”. So, I took a look at it, but…and then I said: “you know, I don’t need to take the course, I already kind of have this background, let me just jump right into it and do it”. And I started listening podcast and researching everything I could, and that’s where it went from there.

DAVID ALADDIN: In 1997 you’ve started, kind of -ish?

KEVIN KING: Yeah, ’95 I think it’s when I when I’ve sent my first e-mail. And I started my first selling online, first e-commerce sight, I think ’96/’97. It was in fact before there was a PayPal even, you know, people had to like…I think I used plug n pay or something back then. It’s still around today, but there were the first guys to actually take credit cards online. So, yeah, I go back. And I think Amazon was…I haven’t looked. I have daily withdraws on my Amazon account, so I am one of the…so, it’s an old school account, so I think maybe ’99 or 2000 probably is when I did my first Amazon stuff.

DAVID ALADDIN: Do you know why they removed daily withdraws?

KEVIN KING: I have no idea. Someone told me they took it away in like 2011/2012, and so any accounts after that. But it probably had to do with…I mean, you know, just protect themselves against returns, I mean, against people taking their money every day and then them get left held with a, you know, a bunch or returns or a fake seller, or something, I sure they got burned a few times. So, I don’t know what the exact reason is, but I am happy to have it.

DAVID ALADDIN: Well, I know there’s like services that come out trying to give us our payment before the two weeks, and you don’t have to deal with this kind of nonsense.

KEVIN KING: No, I think there are a couple different services that take 1%-2% and do that, but they still hold some back. And yeah, it is every day I can login, 6 days a week, so I’ve got the time. It helps more on Christmas when you know, if you are doing 10.000-20.000-30.000 and $50.000 a day on Christmas and you need that cash flow instead of having to wait two weeks. I got it figured out that if you do it before 4 o’clock central time, you give it about 30minutes for it to go through the system, so about 3:30 by central time, if I do that on Wednesday I’ll have the money Friday morning in my account. So, during busy times I’ll login like daily like clockwork, and just take daily withdraws. And it definitely helps as you are growing and as you are scaling.

DAVID ALADDIN: So, let’s go back a little bit. At 17 what were you doing? Like, what took you on this path?

KEVIN KING: Well, at 17 I think my first job was in a McDonald’s, working in a Mc Donald’s, and then I worked in a dally and then I delivered pizzas. So, those are the only three jobs I’ve ever received a W2. I’ve never worked in the corporate world, never done anything like that. And I’ve always been interested in direct marketing since I was a child I was selling stamps by mail as a, you know, 12year old. And I was always an entrepreneur, mulling people’s yards, painting numbers on street curves, everything I could do to make money. I made so much money as a kid, you know. I was making couple hundred dollars a week as a 12 or 13year old, and so my parents were like: look, this is too much money for 12 or 13year olds, so you have to save half of it, and they end up dumping that into a bank account and gave it back to me when I was in college as a, they said, as an allowance. So, that was my beer money.

DAVID ALADDIN: What did go to school for?

KEVIN KING: Marketing, Texas A&M University.

DAVID ALADDIN: And then you decided not to go toward the typical rout?

KEVIN KING: Yeah, I don’t think I can work for anybody else. I think I’d lasted a day or two if someone else is telling what to do or to, you know, look over my shoulder, or you are doing the hard work and someone else if getting the credit. It’s just not my thing. And so yeah, I came out of school and start selling t-shirts on campus during college, during football games, we’d get the license for the school and we’d do all kinds of stuff, and then I travelled around all the spring break spots with the back of my car with a buddy of mine selling, you know, “get drunk” shirts to spring break kids and stuff. And then I did that for a while, and then I started a couple other businesses and just went from there. So yeah, I’ve always been a “direct marketer”.

DAVID ALADDIN: You’ve literally direct like right to the customer!

KEVIN KING: Yeah!

DAVID ALADDIN: So, you’ve been hustling before like, you know, without the distribution.

KEVIN KING: Yeah, I am kind of antithesis or anti guy in this business. A lot of people, there are either attracted to this Amazon business and a lot of marketing out for all these people doing courses as “quit your day job” you know, “get your life back” “travel the World”. I’ve already done all that stuff. I organized one of my businesses so that in 2007 I could travel. So, I was actually, for seven years, I would spend like two weeks in the office and two weeks on the road, travelling all over the World. And so, I’ve already done that. And, you know, I had some money from the last business, I was doing pretty good and started to run out after about seven years of doing that, so I was like okay, I got to get serious again, and that’s where I jumped into the Amazon. I was like okay, this is perfect for my skill set of e-commerce, direct marketing, I know all the…I’ve been buying stuff in China and doing all that. So, none of that was new to me. Just had to learn how Amazon likes everything done from a third party point of view. And that’s how it started. So, I have five brands in five different categories on Amazon.

DAVID ALADDIN: So, just leading up to it, in 2007 what type of business allowed you to travel everywhere?

KEVIN KING: I had a television business; we were shooting TV shows all over the World, so… But we would go there and we would, you know, on some island in the Caribbean, and be working for a week and not really get to enjoy the place. I mean you are there, yeah, that definitely beats being in an office, but as I want to come back here and like spend a week and get to know this place really, so that’s kind of what led to it. And so I had my bucket list and I just made a list, and it was supposed to be one year of travel. And I wasn’t backpacking; I wasn’t staying in hostels, or… I was hiring a private guy wherever I went, you know, so that you almost have like a friend there, drive me around, show me everything, they’d take me to their house for dinner so I would get a real taste of the culture. And then I end up going in about 90 countries in all seven continents.

So, it was… One year turned into seven, because it became kind of addicting. I mean, you’d go out there, you know “oh, man, I got to check out this place!” or someone being “oh, have you been here” like “no, that sounds really cool!” And it’s the best education you can get. I tell people, you know, a lot of them, especially here in America, a lot of the Americans don’t even have a passport, I think 90% don’t even have a passport, or their idea of international travel is go down to Cancun, or go to Caribbean. And to me, that’s not an international travel. You got to get out where you don’t speak their language, you don’t know what the hell you are eating, nobody can communicate to you, and to really experience a culture and really get out there, and not be a tourist, but actually be a traveler. There’s a big difference between those!

DAVID ALADDIN: Do you think the products that you have today are a result of some of the travelling that you’ve done?

KEVIN KING: No, none of them are actually.

DAVID ALADDIN: Interesting!

KEVIN KING: None of my products are related to travel at all because I am not married to any of my products. I mean, some people…you know, you see even it on SharpTanks, you know, some of those shows where people come out and think their product’s the best in the World, and there’ve like spend 5years developing this, and everybody, all of my friends like it, everybody likes it, I know it’s good. I don’t get emotional like that. I mean, I used the tools out there like on Amazon and whatever people want is what I give them, and whatever’s selling whatever I think there’s an opportunity.

And so I’ve started five brands on Amazon all at the same time because I had a little bit of money to put into it. I wasn’t coming with 500bucks or something. And I wanted to see how each category…because on Amazon each category can react differently. I mean, there’s different rules, different things, different levels of competition. And so I wanted to see which ones would make sense for me to pursuit deeper, you know, to build out of Amazon big social Facebook and Instagram sites and all that kinds of stuff. And so, out of those five there are three of them that I am dialing down and focusing on. The other two, I still got some products there and they are making money, but I don’t think there’s big potential. And so, I’ll narrow those five down to three over the…by the end of this year.

DAVID ALADDIN: Me and you started actually around the same time it seems. Except you have five brands and I have one. Where did you get all this time to launch five brands at the same time, and then also have that confidence to just launch this much all at once?

KEVIN KING: I am a one-man-show. I have no VAs, no helpers. I am just now in the process of hiring someone to help on the social media side, because like I said, I’ve narrowed those five to three that I really want to focus on, so I am building up a whole Facebook and Instagram, and I hired someone to actually do that. But that’s the only help I have. I mean, I still…most of my products come from China to me, and yesterday I was out in my storage, you wrapping five pallets, putting stickers on boxes and wrapping pallets, and tomorrow the truck will come and pick them up and ship them to Amazon. I just work efficiently and smartly. And like I said, I’ve been doing this for a long time, so I am not trying to be…

You know, some people get into this like: I want to grow this to $100million Company. That’s not what I am trying to do. My goal is 10 million bucks. I mean, this year, I’ll hit about 4million on Amazon, but my goal in 10million by the end of 2019. And I’ll be happy. I don’t need… I’ve been there where I have an office with 16 people and all that headaches, and I am not looking for that again. I’ll probably hire one more person and that will be it. I’ll just keep leaned and mean, and that why it gets easier to adapt, and easier to change as Amazon changes. Because, you know, if you’ve got big office with 16 people, and overnight Amazon makes an algorithm change, or they kill your product for some reason, you know, it gets suspended… You know, I hear horror stories of people having to lay-off people, and you can’t be as nimble. And so, I’d rather have 10million sales. You know, I can with a 20% profit margin, you know, some of that reinvested, I can live on 500.000/a million a year, I’ll be happy.

DAVID ALADDIN: No big deal…

KEVIN KING: Yeah, and so I don’t need all of that headaches and all that other stuff, so, that’s not my personal goal. And like I’ve said, I already traveled all over, so I’m not doing this to, you know, go work the four-hour work week, like some people think, which is a policy in this business. Amazon is not a four-hour work week. I mean, it was for some of the people that got in maybe 2012/2013, right place/right time on a few products. But in today’s World, it’s a lot of hard work. I mean, if you want to you can work the four-hour work week with your side gig, and you keeping your normal job, and this is your vacation money, or college money, or whatever. But if you want to make a real business out of it and make real income, you know, 50 hundred thousand a year, it’s a lot more than four hours a week you got to work.

DAVID ALADDIN: Great! Okay, how much did you initially start off with to get to this amount within two years?

KEVIN KING: I started off with about a $150.000. But some of that I actually…two of my products that I started off with out of those five brands, it’s three of them I did the typical private label, find something in China and differentiate it. I really differentiate my products heavily. A lot of people don’t really do that, but I spend time to change it up and to differentiate its packaging and everything. All my packaging is nice. In two years, I’ve had 20 sku’s, I’ve had one highjacker once. So, I don’t have that problem because I differentiate so well. But when I started two of those brands I actually created the product.

So, it took a little bit of more money, because I actually came out with the idea for the product, had it designed, found someone on UpWork to actually do the CAD stuff, had the factory make the moulds for it, and so I made my own product as in dog category. And then another product was in the Apple Accessories category. It’s a charger actually for the Apple watch. I completely…all the watch stands that are out there right when the Apple watch first came out, there were just…there were ugly, and so I created my own that was instead of selling for 10 or 15 bucks like everybody else, I sell it for 80 bucks, and because it had a built-in… it had a lot of extra features on it that the others didn’t. So that cost me about $35.000 in moulding costs.

DAVID ALADDIN: That is a lot, yeah!

KEVIN KING: Yeah, so that’s…I took that approach on that product, and that product now is going through…I’m doing a version two of it, fixing a couple of issues I had on my first and adding a couple of new features, and it will be out for Christmas. But that product, at one point, when it first launched, on Christmas of 2015, it was selling $25-30.000 a day on that one product. So, it was a big investment upfront, and it was a risk, but in the end, it paid off handsomely.

DAVID ALADDIN: So, you are like a hybrid, you are not even private label, you are like kind of an inventor as well.

KEVIN KING: I would call it…I don’t really call myself an inventor.

DAVID ALADDIN: You brought a product to market, so…

KEVIN KING: Yeah, I brought a couple.

DAVID ALADDIN: A new product, yeah…

KEVIN KING: And I do the same thing, I have dog treats, and I mean, I am big on differentiation on images. I spend a lot of money on my foreign photography, I mean; I am talking tens of thousands sometimes. And I’ll do a photo shoot for nine of my products and I’ll get… I might spend 15-20 grand on photography. I mean, I group them together to save, but my images set things apart. Like, I have a dog treat, for example, that everybody else put in some plain plastic bag with a little label on them, just a simple private label, and sells 20 or 25 of these treats in a plastic bag for I don’t know, 30 bucks.

DAVID ALADDIN: Eatable, right?

KEVIN KING: Yeah, they are eatable, yeah, consumables. And then I have a treat in that same line where I have three in a bag, instead of thirty in a bag, I have three. And I don’t put in a bag. I put it in a nice box, like a cigar box, almost, and with really nice packaging.

DAVID ALADDIN: It’s like framed!

KEVIN KING: Yeah, for my three…And my images on there are very special and very good. So, to really justify this, but I sell my three for $50. Everybody else sells their 30 for $30. And so a lot of people always think on Amazon it’s a race to the bottom, Amazon customers are always looking for the best deal and the lowest price, and that’s simply not true. Something like 47% if you look at the stats of Amazon seller, are very…are making over 75 or a hundred thousand dollars a year and they are upper middle class and above. And a lot of them are not pricing shopping. And they might price shop on Amazon, so if you are selling a garlic press, and yours is $8, and the other guy’s $9, and they look identical, they are going to buy the $8 one every time. So, that’s where the price shopping comes in and that’s where people get confused. But if you can differentiate the product and justify its price, people eat with their eyes first.

So, if you show them a really good image on Amazon and like tell them why in the marketing copy like why that price is justified, you can get it. And so that product that sells, you know, at 50 bucks and the guy that’s selling it at $30, he’s probably buying them at, I don’t know, $20 let’s say, $15 let’s say, and he’s doubling his money. So, he’s buying at 15 from the wholesaler and he’s selling it for 30.

Well, after Amazon fees and everything else, you know, he’s making what? 5 bucks or so on every sell he makes. And he may have a BSR of a thousand. So, that means he’s selling say 20-25 a day at that BSR. So, he’s making a $125 profit a day on paper off of that item. If you take mine that’s selling at $50, my cost on that is a little bit more that his, because I am doing some special stuff to it, but it’s not much more. So, if my cost on it it’s just let’s say $20, his is 15, mine is 20, I am selling it at 50, Amazon take roughly a third of that. So, I am getting about 35 from Amazon minus my cost, I am making $15 profit on every item. My BSR is about 5.000. So, I don’t care, because at that number, if he’s selling 25 a day and making $125 of profit, you can do the math really quick and see that I only need to sell about 8 a day to make the same number, the same amount of profit with less headache and less stock outs and everything less than him. And I sell about 10 a day.

So, in the end, I am making more money than he is. I am not worrying about high jackers; I am not worrying about all this stuff. So, you have differentiated. And I think that’s where’s the biggest opportunity in the future. People say Amazon is dead, this opportunity is gone. Absolutely not! It’s only going to get better! But where it’s gone it’s for the simple (inaudible)stuff, the simple punching in some numbers into (inaudible), or one of those unicorn smasher, or one of the others. Add some parameters and come back, and just cheaply put your label on a product. Those opportunities, if you could make one of those work, it’s like a lottery ticket! But there’s tons of opportunity for differentiation! Now, with the EBC the Enhance Brand Content, you can really ramp up what you can do if you are brand registered. And I do that with all my products. And people will pay. And people forget that in this business. They are looking for the quick, easy out.

They are not developing brands and they are not developing really good products that people will pay good money for. I mean, there’s a reason some people buy a Lexus and other people buy a Chevrolet and they both do the same thing, but… It’s the same for these products, and people forget that. And they just become too…I don’t worry about… I don’t use any keyword ranking tools, I don’t use spy on my competition, I don’t care what they are doing. I mean, when I am going into a market, I will look, I will use the different tools that are out there to actually see, you know, are this market… Like, previous example: I was in China sourcing some stuff in April. I came across a product and I was like: this is a kickass product! I got to get this on Amazon! I go back to the hotel, and I look and look, use the different tools, and I am like: holy shit! There’s like 20 people already selling this. You know, they have like 200 reviews +. It validates all the rules. People say, you know, the different gurus teach.

But I am looking at like: look, you got all these ads up, and they are selling a million dollars a month of these top guys. You know, they had the reviews, but they are missing a couple things here on this product. There are a couple things you can do in the bundling, couple things you can offer. I can come in and get 10% of that market. So, I am pretty confident with my marketing. I can go in and I can capture a 100grand a month of those million dollars sales, if not more. So, that’s how I look at that stuff, as differentiating and not just going by some basic formula. And so I use these tools to see is the market…because those tools are all guesses, none of them are accurate, doesn’t matter who you use. IT just gives me an idea relatively of the market.

DAVID ALADDIN: Okay, so how many SKU’s do you have per brand would you say?

KEVIN KING: Couples, I only have a couple of SKU’s effective in a brand, and my biggest pulling right now is like 12. Total active right now is around 20 SKU’s.

DAVID ALADDIN: Okay, I have about 20 as well. I am just trying to see how you’ve got a lot…like so much done and, you know, two years, it’s not a lot of time. And I’m, you know, in my business everyday working as well. So, I am just gagging if I am working fast enough, or…

KEVIN KING: Well, I work like, you know… I was working 16… I work 16 hour days there, 7days a week. You know, money never sleeps. So, a lot of hustle, a lot of hard work and then, just picking the right products and market them. And I’ve dropped products. You know, in the last two years, I’ve 20 so much, whatever, 20 SKU’s right now, but out of those I am about to drop eight of them and I’ve dropped six before and not because they are not profitable. I just have a rule that I give a product six months. And after six months, after I’ve done all the tweaking, all the launches, all the, you know, got it going, done the whole initially to get it going, if after six months of this it’s not throwing $2000 profit per month, and a profit is after all advertising cost, after all shipping, everything, and if it’s not $2000 profit per month, then I drop it.

DAVID ALADDIN: That’s cold!

KEVIN KING: Because I am like I can’t…you know, money is limited. I am not multigasilioner that can just keep dumping into it. So, I am like: look, if I can…if that product costs me… I might have a carrying cost, you know, depending on how fast they are selling, how much they are making. I can take deployed that same investments in another product and get a better return. So, that’s how I look at it. I look at it almost like stocks at all of my products. Like I said earlier, I am not emotionally tied to them like the people in SharkTank and so many other people are. Like, if it don’t work, yeah, I spent a lot of time developing really nice boxes, taking pictures, I drop it. I move on to the next one. I just…I don’t get tied to them or like hold out hope, or try to rescue them. I mean, it’s pretty obvious after like two or three months usually, that if that product is going to have any potential or not.

DAVID ALADDIN: I actually…I’ve had like 500units that were pretty like oversized units, but they weren’t selling. And it just came time to just kill them. I had them all destroyed. It was kind of painful, but didn’t make sense.

KEVIN KING: I’ve never lost money, because I’ve had a couple and I just lower them down the base like a break even, and just turn off PPC and just let the one or two people a day discover them, find them, and use them. I think one of them took me…one of my first products, it took me 10months, but from the time I said: okay, screw this product, it’s out of here, it took about 10months to finally get rid of them all. But I just let them sit, let them… I mean, it got some bad reviews; I didn’t do my homework correctly since like 3star products. But it eventually sold out. And I got my money and moved on. So, I haven’t actually ever, like you said, take 500 and just destroy them, I’ve never done that.

DAVID ALADDIN: How long did that mould take to develop? I developed a mould myself, it took about a year to actually finally get it onto the market, so…

KEVIN KING: Yeah, I mean, my process is… The dog category, it took about… I started that product, designed it in the summer of 2015, I launched it in January, so what’s that? 6 or 7 months from…7 months from conception to…

DAVID ALADDIN: It is pretty good…

KEVIN KING: …on the market for that one, but, you know, all my… And then the other one took a little bit longer, the electronic parts and stuff, and that one was pretty complicated. But what I did on those, I mean, I did…you know, I designed it, had someone on UpWork do the CAD work, then I took it to guy here that has 3D printers, I mean, he has like 20 of them in the building in his backyard, really he’s like a 3D printing junky. So, he would print me 3D prints of them, I would test them, you know, I would test it with a dog, the ones that are electronics I’d take to the Apple store and like: hey, can you pull out all the watches, you know, in you draw here and let me make sure every bands fits.

DAVID ALADDIN: That’s funny!

KEVIN KING: And then I’d make adjustments, go make another 3D print, you know, get it right, and then send it to the factory. They will have to make a prototype which will cost me sometimes like $1500 for just a one like functioning, have the power and everything prototype. I’d check that, make sure everything’s okay, like any adjustments. Then they make about 20 more prototypes. And those are the ones that I say: okay, these are all cool. I would send those out to the reviewers, so get the reviews going. And then wait for the product to get manufactured and brought over.

DAVID ALADDIN: I am surprised you were able to that within seven months. Like, you know…I kind of almost gambled, because I… And it took a year, cause, you know, I always only able to get one or two samples, you know, back and forth. I am like: this is taking forever, but I think this is pretty good, so let’s go with it. But it seems like you had a lot of samples done within the seven months.

KEVIN KING: Once I green lighted the product, it’s probably three to four months. About a month to make the mould, and then three months to manufacture just like any…a lot of other products, 2 to 3 months. But yeah, it’s… I did have some of them flown over like on Christmas, 2015, Apple stand was doing really, really well like I told you earlier, and so I had no choice, but they weight about almost 3kilo each, so I’d just…I actually put some pallets on the airplane and airfreight them over, and I spent $16.000, you know, over a couple of pallets, but it was Christmas and it cost me like $10 a unit, you know, to bring them over. But I am selling them for $80, and so I had a good margin and my cost was almost 22bucks. And so, I just had to eat 10bucks margin. And it was worth it to maintain a minimum. As you know, on Amazon, you don’t want to run out of stock. So yeah, I’ve done that too.

DAVID ALADDIN: Yeah, I have too. But for me, I have overbought due to fear of running out of stocks. And now, I mean, like I am not really…I don’t really care if I run out of stock as much as before, cause I… It’s been painful to oversupply.

KEVIN KING: Yeah, I typically order thousand. I am not of these guys that: let’s test 50 units and see what happens.

DAVID ALADDIN: Yeah…

KEVIN KING: I mean, I am not going to dip my toe in the water, I am going to jump in. And so I’ll order a thousand. And I know, like I said earlier, I can sell a thousand. And I’ve done the same thing as you. I brought over a thousand that are doing really well and like: okay, let me order 1500 to get ahead of this. And then all of the sudden the sells start slowing down. And those 1500 arrive and I’m like: ah, god damn it, man…now I am going to be stuck with these for six weeks, or six months, or eight months, or whatever. So, I’ve had that happen too. You make those mistakes. So, as you go, you learn, you kind of learn what works, what doesn’t, you develop your own risk tolerance inside what’s best for you.

DAVID ALADDIN: Let’s talk about stability in terms of suspensions. You’ve been in this game for a long time, even before the private label. Have you had your fair share of suspensions or people you know that got suspended?

KEVIN KING: I don’t know anybody personally that’s been suspended. I mean, several different masterminds…and also, you know, like… I don’t know anybody personally. You know, you hear stories on Facebook, and you hear them on the podcast… But I’ve had a couple products suspended temporarily, you know, for a safety issue, because a customer said something.

Or someone doesn’t know how to use the product. I’ve had a makeup product, it was a 3D fiber lash mascara, so it comes in two different valves. And a woman opened it up and one of those vales is dry because it’s like fibers, there are like tea leaves almost, and she’s like: oh, this is dry, it’s dried out, this product must be old, it’s all dried out! So, she sent it back. And someone wrote a review service, she paid, you know, 99cents for it. I mean, she sent it back and I was going to send a replacement. And she’s like on the next one: oh, it’s dry too!

So, she filed a complaint because there two of them back to back, and Amazon suspended the product. And had to go do a warehouse check. And then it took me about two weeks to get it up. So, I’ve had a couple incidents like that where you are dealing with stupid ass customers that cause that. But my accounts ever suspended? No, I’ve never had had that. I do have insurance. There’s insurance through Lloyds London that they insure Amazon accounts, so I do have that insurance so that if I ever did get suspended, they’ll pay up to a million bucks, as long as you weren’t doing some black add or some crazy thing. But they’ll pay you out on that. So, I do have that and I pay about 3grand a year for that coverage.

DAVID ALADDIN: And you answered my question before I asked it! Interesting! Okay!

KEVIN KING: I mean, and I also pay…I also have product liability and general liability. I mean, Amazon actually requires general liability. Most Amazon sellers don’t have it. But the general liability usually have I think 2million dollars policy, but that just covers basically that if you know the UPS guy sticks a package, you know, on the door step and the customer trip, or if something happens in the warehouse. And that’s about 5-600 bucks a year. And that’s what most people have and they think they are covered. But you are not. I also have product liabilities; they are a completely separate insurance. And product liability covers you if, you know, someone eats your product and they die, or if someone’s using your product and they hurt their back, or, you know, it catches on fire and their house burns down, or whatever. So, product liability is depending on your product and your category, and your sales, so there are a lot of variables in that that will determine the price, but I am paying about 5grand a year for that. And covers me so that, like I said, if someone gets hurt, or something gets damaged using the product, I am covered.

DAVID ALADDIN: 5k a year for both liabilities?

KEVIN KING: No, 5k a year for the product liability and that will vary… I mean, if you are selling more, it will be a lot higher. If you are less, if you are selling supplements, you know, human supplements, that price is going to go out. So, that’s not… The $500-600 price for general liability, that’s pretty much for everybody that can get a price around that. But the product liability is all depending on your sales and the categories you are selling in. But for me, it’s about 5grand a year. And then I have on top of that the Amazon suspension insurance which is 3. So, you can see that I am paying about 8500 bucks a year to cover my ass.

DAVID ALADDIN: When I talk about Amazon, it is like all these people are taking money out of your pocket from all different services, and liabilities, offer services, Amazon’s 15% fee, warehouse and through FDA. It’s just the list is never-ending. And then, by the end of the year, you look at how much you’ve paid. Starts, you know, looking smaller and then you…

KEVIN KING: There are a lot of people doing… I agree with you! There’s people doing 10million dollars a year on Amazon and they have trouble paying their rent! I mean, people get confused. You see it on the forms and people are like: oh, I got 40% profit margin, 60% profit margin. I call bullshit on every single one of them! They don’t know they are not true numbers. So, I mean… And you got to factor-in everything. They may have a 60% margin on what they are paying to what they are selling it for, but when you factor-in, like you just said, all these other costs, you don’t have that margins. I believe that if you can hit a 20% bottom-line margin, you are doing well on Amazon.

So, after your PPC, after your warehousing, after your returns. A lot of people don’t count, factor-in returns. I use HelloProfit. You know, there are other softwares sellers; there are tons of them out there that do it, but…to manage that, to watch that stuff. And then you know, Zero and some of the Quickworks, you know, that will kind of give an idea too. But it’s not as on point as like HelloProfit for what we do. So, I am typically at about a 20% margin, you know. Some products, you know, I might dip down, that’s another criteria. As I was talking about earlier, I’d drop a product if, you know, if I can only achieve 5% margin on it, I’ll: screw it! It’s not a good ROA. So, move on to something else.

DAVID ALADDIN: So, what are your thoughts about…have you been expanding outside of Amazon?

KEVIN KING: Yeah, I sell on Amazon Canada. Amazon Canada is about 7% right now for me. But I only have really six SKUs over here of my 20, and 2 of them aren’t selling, they sell like one a month, even though they sell 20 a day here, it’s like 1 a month over there.

So, I got a couple of SKUs that took off over there. And so, it’s about 7% of my sales. I am going to expand to Europe later this year, but that…it’s cash flow, you know. It’s basically like starting a whole another business over there and I’ll take my best sellers. My philosophy is: test everything here on Amazon, get the bug worked out, like I said earlier, find who the winners and losers are, and then expand out, so you are not going over Europe with you know, with a garbage product, and you’ll have to deal with returns and getting them back, or getting a suspension over there. And I also sell in Jet, I sell on WalMart.com, sell on eBay, and I am on shoppify site, and then I did some wholesales through some of the deal sites like TouchOfModern which is kind of like a…if you are old enough, you remember SharperImage, they are aimed at min, they have about 10million min, and they do deals. They run it for like four days.

So, you have to price competitively, but I’ve done well there. Most of my deals over there run over four days and then I’ll do five…a nice five figures. I do stuff on Zulily for some of my stuff aimed at women, and it’s owned by QVC, and they also do side deals, so I also do some there. And then I get approached by…like my dog stuff, I just got approached by chewy.com, which is…actually there are bigger than Amazon on selling dog products. They sell more than Amazon. But they are very smart over there. They, rather than me having to approach them, because I’ve reached out to them a couple times through a couple of people I know, and I am just basically ignored, but they mind their search data. They get reports. The buyers get reports of what people are searching for in their search box. And so my brand is getting searched for quite a bit as a result of Amazon and some Facebook ads and stuff. So, they reached out to me and said: hey, we are seeing your brand being searched for a lot, we would like to carry your products. But the problem with them is they want NET90 terms. So, I am basically…

DAVID ALADDIN: Hate that, yeah…

KEVIN KING: Yeah, so it’s a cash thing. So, I have to figure out what I want to do. And then, besides the price I give them, unlike Amazon, so I can go to Chewy and say: okay, your price is $10 for this product, well that’s not the price they pay. They take 22% off of that for other fees. So, 4% advertising fee, 3% return co-up fee, all kinds of bullshit fees that they add in. So, you have to factor that into your price too, and so instead of $10 wholesale, you know, I might be getting $8 off of it, or $7.80. And then you want to get paid, you know, early or whatever, and you take a few more points. So, you can lose pretty quick. And then if I have to factor that to cash flow, because if they come back and they give me a quarter million dollar order, you know, unlike Amazon, you can like buy smaller amounts and just feed the beast as you need to.

And you know how long is going to take, but they give me a quarter million dollar order, I am going to have to go out and factor that, so I am going to have to pay someone 3% to factor it, maybe 4% to actually run the production run, to pay the factory, and then wait 90days to get paid. So, at the end of the day, I might not be making much money. So, I am not sure… Have to be very careful on that stuff. And retail is the same. A lot of people are like: I want to get in the big box retail get in the best buy. They can be great places. And 90% of all things are still bought off in physical stores, so that’s not dead, but it’s a whole different game, and it takes a whole different mindset and whole different pocketbook to do that stuff.

DAVID ALADDIN: I think Chewy just got acquired by…was it PetFood, Pet-something…?

KEVIN KING: Yeah,

DAVID ALADDIN: PetSmart?

KEVIN KING: PetSmart.

DAVID ALADDIN: So, you might be able to get into retail as well with that.

KEVIN KING: Yeah, I could. I am playing that game too, but you also lose control. I mean, I do that with… Like you said earlier, if you have a product on Amazon and it’s a dog, you know you are going to sell it through and you are kind of controlling this third party seller. You can modify the price, you can mess with your images, you can influence and run some ads. When you are a box retailer, sometimes that stuff don’t even put out on the floor. I might order a thousand units, send them to different stores and in ten of the stores, they just stay in the back, they never even bother to put it out. And you get returns, you got paid for the returns. It’s a whole another animal that a lot of people don’t think about. It can make sense for some products and for some people, but it’s a whole different mentality than what we think about as Amazon sellers.

DAVID ALADDIN: One thing that stood out earlier. You mentioned that you are a one man team and you have a warehouse. Can you tell us more about what’s your warehouse situation look like?

KEVIN KING: Well, my garage is a whole shipping centre. So, I have, you know, I have one of those big peanuts, the little star phone thing that comes down and I got the whole thing set up as a shipping centre. But I don’t store… I only store a little bit there for… I can still park my car there too, but I store a little bit. Like I said, I am very tidily organized. And so I have customer service stuff, you know, a part is missing or something I can ship from there. And then I have three, and they are like public storage warehouses, you know. They are like three side by side. So, I can hold 16 pallets in each I think and so I have two pallet jacks and you can go to Harvard’s and get it for 250bucks.

So, I keep my… I used to ship everything in to Amazon. I would bring it here, re-label it and ship it in to Amazon, but you know, that gets expensive with Amazon fees. So now I bring it in, I peace mail it. So about every two weeks I’ll go spend about two hours… You know, people are like: oh, I don’t want to hustle with all this. But it gets me off my chair; it gets me a little exercise. So, yesterday I had five big…. I have some oversized stuff. So, I have five pallets that I’ve packed up. You know, all you got to do is move the box around, put a label on it and put the wrap around, put the label. And then send that LTL to Amazon. So, instead of paying $800 in UPS fees, even that Amazon’s heavily discounted rates, I can send it for $75 LTL. So, right there I just make $700. And I know the product is good, I know everything is fine. And I got some exercise. And tomorrow the truck will come, pick it up, go back in and it take me 10minutes. So, for 3hors of my time, total time, I know everything’s done right and I save money, and get out of the chair and not sitting on my ass all day.

DAVID ALADDIN: Interesting …

KEVIN KING: I mean, if you are doing a hundred million a year, I can’t do that. And I have a couple of things, some of my dog stuff or consumables, like a good factory in the US and so they ship direct. So I am not messing with that but anything coming from China, I want to see it, I do inspections in China before it comes and do all that but anything coming from China, it has to come through me, I don’t do any direct through Amazon.

DAVID ALADDIN: That is … you know, that is another cost that is hard to factor into the profits, the inspections that go on in China.

KEVIN KING: I pay 200 bucks.

DAVID ALADDIN: That is pretty good.

KEVIN KING: I have got a really good company, it used to be higher, they give me discounts now because I have done so many but I do an inspection on every single order even if it is the 20th order from that company. You have ordered 19 times from this company, everything has been fine so far, I don’t need just waste of money – bullshit. I do inspections, I have had problems because these factories in China people forget … every time there is a big holiday, a lot of their low paid labor doesn’t return, they go back to their home families, they go back in the middle of the country and they stay there, they don’t come back.

So there is a big turnover at the worker level in a lot of these factories and so things can change over the course of a year. So I just had a factory I have ordered … I think it is like the tenth order from them and it failed inspection and so I made them fix it and I make them repay for the inspection so it is not just fix it and they send me a picture say “look, Mr. Kevin, everything is good”, no, we are doing a third-party inspection again and you are paying for it. And they do and sometimes I have gotten into big fights with a couple of them but one thing I refuse to pay their deposit the rest of the money. I say “if you don’t fix this …” because in China, it is different. Their standards are not the same as ours; in China they don’t care if it is in a nice box for example but if there is a small scratch on the bottom of a piece of cookware, they are like “look, it works, it still cooks your stuff, what is the problem with it, there is nothing wrong with it”. But here, if someone gets a small scratch on the bottom of their cookware, they are going to say “you sold us new”, they are going to complain or whatever, I can’t have that.

So it is a different level of thinking and so sometimes I have gotten into big fights with those guys saying “I don’t care if it works, you know, there is a small scratch here, it is out of parameter, you are allowed to have ten small scratches on an order of a 1000 but you have thirteen, that is too many, you know, you have got to go open every box, fix everything” and they have fought me on it. And they have gotten to the point when one said “screw it”, keep them, I had paid 30% deposit I think, I said “they are yours, do whatever you want with them, I am not paying you” and they finally buckled and said “okay, we will open them all up, we will fix it, we will pay for it”.

So it is a challenge sometimes but I don’t trust them at all. And I even do that here in my US factories; I don’t do a big inspection before they leave because I trust a couple of these guys and I haven’t had a big problem but I do once they send it into Amazon, I will order a couple of units to me, to my house just to spot check, just to make sure that they didn’t put the labels in different places this time or whatever. So I will do that as well and in that way, it is totally random, they can’t just … I can’t just tell them “hey, send me a couple of samples” because they are going to make sure they are the prettiest and the nicest ones.

DAVID ALADDIN: So, do you have like … going back to the warehouse, do you have like a big trailer? I am guessing you have to move the pallets from the warehouses. How are you picking up those?

KEVIN KING: Well, I have an agent … like my cut broker is here in Austin, so literally all I do is if my factory in China has got something ready, I just call my agent and say “here is the name of the factory and their address, go get it.” And I don’t know about it again until they are calling me “hey, it is 8 o’clock”, you know, “it is 8 o’clock, we want to deliver today to you at 11, are you going to be around”. And so they bring over a small truck like 25 foot truck or something, it has, you know, 10-15-20 pallets in it and it has a lift gate, we just lift them down, roll them right in to the storage …

KEVIN KING: So, once they are in the storage, no, I have a pallet jack. I have two pallet jacks, you know, those are the metal things you put on the pallets and you move them, I have two of those. And so I just move them … like, yesterday I pulled 5 pallets out right in the middle … in the sun … whatever and I put little stickers because you have to put one, I don’t know if you done than … LTL shipments.

DAVID ALADDIN: Yeah.

KEVIN KING: Put a sticker on each box and then you got to wrap the whole box in cellophane, then I put outer stickers on all four sides like you have to do and then just push it right back in with the pallet jack into the storage and it takes two days for LTL from the time you schedule shipment, Amazon assigns you to a trucking company and it is two days later that they actually come pick it up. So tomorrow …

DAVID ALADDIN: You have the LTL come and pick it up at your storage location?

KEVIN KING: Yeah.

DAVID ALADDIN: Oh, okay. That is what I was wondering … I was wondering if you brought it to house.

KEVIN KING: No, in the past I have brought stuff to my house and sometimes I will do that because I can store 9 pallets in my garage. I was doing that in the beginning but now it is easier just to have them go there because I need it back right in, you know, bring a big, 47-foot trailer and …

DAVID ALADDIN: Yeah but the problem I have had is like they are just not consistent and showing up on time, you know, they always tend to show up whenever they want, they are like a few hours from the scheduled pick up time. So I guess you would have to meet up and wait at the storage unit.

KEVIN KING: Well, my storage unit is three minutes from my house so a lot of times I have the same driver but if I don’t, they go there and they are like “we can’t get in the gate here” or whatever so they call me and I am like “I will be over in a couple of minutes”. I know here they do the pickups in the afternoon because it doesn’t matter who the freight company is, it is always after 12 because they are doing their drop offs in the morning and so it works good. I have no problems.

DAVID ALADDIN: We have got about 12 minutes left. Let’s talk about marketing. How are you getting traffic to your listings?

KEVIN KING: Well, I have a whole marketing strategy that I use to launch and like how do you get traffic now in lieu the terms of service change from October last year. But there is a whole process I go through to launch and it depends on the product but I believe there is a lot of traffic on Amazon, a lot of people are focused on sending traffic from outside of Amazon. I don’t really think you need to do it, you just need to … I mean it does help, there is no doubt and maybe when you are first launching, you can do a few of those, I do a few of those. But when you are … there is a lot of traffic on Amazon and you can maximize that so a lot of people overlook that; they just get the listing up and do some PPC. There are all kinds of stuff you can do with AMS and targeting competitors on a launch, there are all kinds of stuff you can do with frequently bought together, there are all kinds of stuff you can do with cross-promotion in your images to get additional traffic.

There are ways to do the PPC, you know, if I am doing a launch service, you know, like the our launch or one of those guys, I still use those, some people say they are against terms of service but they are not … they are not asking for their views. So I actually … I don’t (inaudible) they go and they do their homework and they are like “these keyword tools, these are the top keywords I want to target” and so they go towards not using the service or using their own Facebook or whatever it may be trying to rank for those words and they are missing the boat because just as traffic words supposedly, doesn’t mean that is the word you are going to be on. For example, I have a dog ball and in my dog ball, I don’t convert of the word “dog ball”, I cannot stay on page one for the word “dog ball” but I can stay on page one for a lot of other variations and ways the people type that in. so I use my PPC when I first launch a product, run that for a couple of weeks, I usually take automated PPC and also I use the manual.

So I will take all those search terms I have found, put them in manuals and run it all with no reviews, nothing. I just run everything for a couple of weeks and see what I am converting on. And then I look for something as … I have a formula for it … it is getting at least a point … at least two sales, at least a thousand impressions; I combine all the data … back up. I download that report and combine all the manual and automatic PPC data into a single Excel spreadsheet so I have everything meshed together. I look for anything that sold at least two PPC for a click through rate at least .7; I look for thousand impressions and I look for signs that I am not worried about a cost, I am not worried about any of that stuff. I am just looking to see what converts and so once I figure that out – what actually converts, then I will actually use that in my launch. So I will look at that data and say “okay, these are the ones I think I can stay on page one for” because you can use a big launch service, do big giveaways to your own list or whatever and you don’t stay on page one. That is because you are not converting on that keyword and so you are just wasting time and money.

So, I will do this and figure out what actually converts for me and target those and when I do that, I typically stay on page one. But then you could do some stuff with frequently bought together, you can do some Facebook stuff; I do quite a lot of things. I mean, it is something that we teach … I am part of the Illuminati Mastermind which is a deal for sellers who are already selling out there who are like stuck, they have done some of the courses, they have done it on their own like “okay, I have reached this level, how can I get to the next level and what can I do” and so we have a program called the Illuminati Mastermind and it is a live training program that we teach and we show exactly how we do all that stuff in there. That is how I get traffic to my … that is one of the strategies but you can do a lot with AMS; if you are not using the AMS, there are a lot of powerful stuff that you can do in AMS and targeting other people’s products when you are launching.

DAVID ALADDIN: Yeah; I hate it when people target my products.

KEVIN KING: Yeah, well you control it yourself by bidding on your own to keep them out of there but it can get expensive too.

DAVID ALADDIN: It is really expensive. I am like “why would someone pay …” like I have it set at a dollar, then two dollars and three. It is like “why are people paying this much to advertise on my listing” – it doesn’t make sense.

KEVIN KING: Well, a good strategy though is if you are launching, the frequently bought together is heavily overlooked. 45% of all sales on Amazon don’t come from search, they come from things that are on the page so if you can get in that customers who also bought this that can boost your sales a lot. I do it even when I launch a product, I will use one of my best products and I will tag it, I will send something out … that is where I use the Facebook because it is off sight because I will go to my customers and say “hey look, if you buy … we have a new dog treat, if you buy my new dog treat” … let me back that … there is a dog treat they are already buying, I know they love this particular dog treat, there are repeat customers. I say “hey look, I will give you 25% off this treat that your dog loves, if you will just go buy my new one” and put them in the cart, I will give them a link that puts them in the cart at the same time. In that way with usually five or ten sales, you are getting a frequently bought together on my own products. Then that leads other sales because other people are finding I have a product that is already established, lots of people are coming in “oh, they have also got this other one, let me click it”. There are a lot of tactics you can do.

DAVID ALADDIN: What is creating that link that adds two products at the same time?

KEVIN KING: A special link that you have to do it … it is a long URL, I don’t have it off the top of my head but that is something that links them together.

DAVID ALADDIN: I am just wondering like is there something that generates it?

KEVIN KING: I don’t know the tool, I am sure one of these guys, you know, there are thousands of different software out there, I am sure someone has a tool that does it. I just know what the link is and I just change out my sense in there and you can do one product, two products, three products, five products or however you want and it just puts them all in the cart together. So with a single click you have everything in the card together so the customer doesn’t have to go back and forth, back and forth, back and forth.

DAVID ALADDIN: Okay. I have been wondering like how people have been doing that. I don’t know if you could send us that link after, I will put it in the show notes.

KEVIN KING: Sure.

DAVID ALADDIN: That sounds cool because some of my products are frequently bought with other very popular items and stuff that contribute a large amount of sales. I am sure you are having some success with it.

KEVIN KING: The Frequently Bought Together, if you can get in the Frequently Bought Together, it can add 5 to 25% to your sales according to Amazon statistics, especially being in that top row of three, it can be very effective. And there are tools out there you can use to do that … we just had the Illuminati Live Mastermind in Cancun, we were like 75 people there and one of the speakers was showing a tool that you can actually use that finds things you should put your product Frequently Bought Together With and it is not always what you think. You may be selling a dog collar and you think “I should get on a dog leash and be Frequently Bought Together with a dog leash” those two go together but your dog collar might not be best with that, you might actually get more sales if you get your Frequently Bought Together dog collar with a garlic press and you are like “that doesn’t make sense”. But the way customers buy and that data is all on Amazon, you have to know how to mine it. And there are tools and ways to do that and you can test that with AMS and see so you can actually use these tools and like they suggest other weird things that you don’t think.

And you take it in the AMS and run as an AMS to test it and see if you think that will work and then once it works, then you can go out and use this and go out to your own customer list and make sure you get that Frequently Bought Together. It could take as little as five sales or if it is heavily competitive, you know, if you are trying to get in the Frequently Bought Together of something that is a BSR 500 for example, it might take a lot more sales. And there is software that does that too, there are software program, charges like a thousand dollars a month for, Rapid Rush guys that does some of this but you don’t need to use all that stuff.

DAVID ALADDIN: Awesome! It has been awesome having you on the show, Kevin! Is there a way for people to contact you?

KEVIN KING: The best way probably if you want to contact me would just be … like an email address or …?

DAVID ALADDIN: I don’t know. Sometimes people like to be contacted at the end of the show.

DAVID ALADDIN: Awesome! Alright; we appreciate all the golden nuggets that you shared today, it has been a very good episode.

KEVIN KING: Cool! I hope I have been able to help some of you guys and gals out there listening, gave you a few things to think about and a few things to look at. David is doing a good job here delivering some good value on this podcast so, I am glad to be able to be a part of it.

DAVID ALADDIN: Kevin King, David Aladdin – out!

KEVIN KING: Peace!

]]>Kevin has been an entrepreneur his entire life. It's been 30 years since he last received a paycheck from someone else. He has created, developed and guided hundreds of products from inception to market. In 2015,

In this episode, you'll learn:

How Kevin pulls 3 Million+ sales a year

* How Kevin picks his products
* Types of products Kevin has had success and failed with
* What most sellers do and what not to do
* How Kevin uses tools, strategies and knowledge to grow his business
* How he is expanding outside of Amazon
* Inner workings of his business, his execution and mindset
* Why he has 5 brands
* How he markets his products
* What he did before selling on Amazon and e-Commerce
* How he creates molds for products
* How much he started with

And much more! Stay tuned for transcript

Notable notes:

Link for how to add two products to cart:
https://www.amazon.com/gp/aws/cart/add.html?ASIN.1=XXXXX&Quantity.1=1&ASIN.2=XXXXX&Quantity.2=1

DAVID ALADDIN: Great to have you on the show, Kevin!

KEVIN KING: Glad to be here, man!

DAVID ALADDIN: Can you take us to the beginning before your first million, before Amazon? Where did it all begin?

KEVIN KING: Well, like you said at intro there, I’ve been an entrepreneur my entire life. I think the last time I got a paycheck from someone I was like 17years old, and that was about thirty years ago. So, (inaudible) back when e-mail first started, so I’ve been involved in this for a long time running several different sites, e-commerce sites, fulfillment stuff. So, the Amazon stuff. I’ve been actually selling on Amazon for 12years. I was actually using Amazon almost like e-Bay in the beginning where I would just…I would be one of those high jackers.

If I had something, some old DVD player, or something laying around the house that I was like just throwing it up on e-Bay, sometimes I would throw it up on Amazon, just jump on somebody’s listing and sold it as used. And then I’ve been also doing some wholesale to Amazon through the Amazon Advantage Program which is their program for DVDs, books and that kind of thing, and so audio tapes and stuff, it’s like a special program. So, I’ve been doing wholesale with them for almost 20years on a line of calendars that I do, it’s seasonal product.

So, it’s almost like vendor central, but they issue purchase orders and then we ship them in. But then I started the private label stuff on Amazon in 2015 and like everybody else, I think I saw one of those AMS adds come across my e-mail. I was like "this looks interesting". So, I took a look at it, but…and then I said: “you know, I don’t need to take the course, I already kind of have this background, let me just jump right into it and do it”. And I started listening podcast and researching everything I could, and that’s where it went from there.

DAVID ALADDIN: In 1997 you’ve started, kind of -ish?

KEVIN KING: Yeah, ’95 I think it’s when I when I’ve sent my first e-mail. And I started my first selling online, first e-commerce sight, I think ’96/’97. It was in fact before there was a PayPal even, you know, people had to like…I think I used plug n pay or something back then. It’s still around today, but there were the first guys to actually take credit cards online. So, yeah, I go back. And I think Amazon was…I haven’t looked. I have daily withdraws on my Amazon account, so I am one of the…so, it’s an old school account, so I think maybe ’99 or 2000 probably is when I did my first Amazon stuff.]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean58:27AS 87: How I will save $40,000+/year by automating my customer service on Amazon, ebay, Walmart Jet and beyond.https://amzsecrets.com/saved-40000year-automating-customer-service-amazon-ebay-walmart-jet-beyond/
Tue, 16 May 2017 17:26:22 +0000http://amzsecrets.com/?p=6219https://amzsecrets.com/saved-40000year-automating-customer-service-amazon-ebay-walmart-jet-beyond/#respondhttps://amzsecrets.com/saved-40000year-automating-customer-service-amazon-ebay-walmart-jet-beyond/feed/0How I will save 40,000, by automating my customer service on Amazon, ebay, Walmart Jet and beyond.
What’s up guys, today’s episode, episode 87, is on How I will save $40,000+ by automating the customer Service in my Amazon, eBay, Walmart, Jet, and website support tickets. Today’s episode brings a huge golden nugget so stay in.
One of the hardest parts of running an e-commerce business is the customer support side. It’s not just a lot of work providing the best customer service possible, it takes a lot of the founders time, all the meanwhile you have to add more products, scale the marketing and grow to the moon.
I believe, if it wasn’t for the AmzSecrets show, I wouldn’t have gone this far to force myself out of the trouble that I was in. I would wake up each day, spend 1-3 hours checking eBay, checking Amazon, checking facebook channel, and then checking my email inbox for my website.
WHEW. It was a huge time waster in terms of founder energy. Every few months I would post in our facebook group, AmzSecrets.com/fb, how is everyone doing their customer support? And some people would say outsource, but not really go into detail.
The problem with spending even 1 hour per day on customer service is you really don’t know how those hours would be spent differently if you otherwise had them. Before this episode, I had hot-keyed customer responses directly into my keyboard. It was pretty awesome. It saved 10 minutes per response, and gave the perfect response. It was pretty optimized, it was cool.
And then recently I spoke to John Jonas, who has outsourced every task to 17 different virtual assistants, in episode 86.
This really changed my perspective and evolved my business a major step further. I probably wouldn’t be spending time doing this podcast right now, if I hadn’t built out my customer support. I’d be answering tickets, and closing out those spam ticket responses.
I started looking at FreshDesk…
I created an account, setup my email forwarding, It was very solid, however I realized it still had one major issue:
How do I have customer support answer questions everyday without giving them access to my account’s sensitive data?
Now that is a golden question. And it took me over 10 months to figure out.
Freshdesk was great, because it offered centralized support tickets. I could thus forward emails all to one spot, and freshdesk would create support tickets out of each one.
The problem however was freshdesk was too general. It didn’t pull order information from Amazon or eBay. So I canceled my free trial of freshdesk and when onto querying e-commerce support desks, which led me to xSellco. And no this is not a promotion of xSellco, or affiliated to them in any way.
XSellco is pretty awesome, it pulls e-commerce data from both the e-commerce channels and aggregates them all into one spot. It’s like a freshdesk or helpdesk but for e-commerce.
Now that I have pulled the order # per email coming in, and the customer address, I can now get a virtual assistant to assist per customer order.
Now this led to the next part, and I really owe thanks and gratitude to John Jonas from episode 86, who mentioned to “create videos step by step on how you currently do customer service.”
It takes a lot of upfront work, but after that it gets easier.
Yes that is really time consuming. And a pain in the butt. But once you get it done, you have opened 2-3 hours per day every day. You have also untied yourself from the desk of the computer to do the brain thinking part of your business.
Once I had xSellco, driving support tickets from multiple channels, all in one spot, I knew I could automate the whole entire shindig.
This first process took about a week to feel comfortable with support tickets going all into one spot. I had to check to ensure that they were correctly being loaded, the data was accurate from the respective channels, including my websites channels.
How I will save 40,000, by automating my customer service on Amazon, ebay, Walmart Jet and beyond.

What’s up guys, today’s episode, episode 87, is on How I will save $40,000+ by automating the customer Service in my Amazon, eBay, Walmart, Jet, and website support tickets. Today’s episode brings a huge golden nugget so stay in.

One of the hardest parts of running an e-commerce business is the customer support side. It’s not just a lot of work providing the best customer service possible, it takes a lot of the founders time, all the meanwhile you have to add more products, scale the marketing and grow to the moon.

I believe, if it wasn’t for the AmzSecrets show, I wouldn’t have gone this far to force myself out of the trouble that I was in. I would wake up each day, spend 1-3 hours checking eBay, checking Amazon, checking facebook channel, and then checking my email inbox for my website.

WHEW. It was a huge time waster in terms of founder energy. Every few months I would post in our facebook group, AmzSecrets.com/fb, how is everyone doing their customer support? And some people would say outsource, but not really go into detail.

The problem with spending even 1 hour per day on customer service is you really don’t know how those hours would be spent differently if you otherwise had them. Before this episode, I had hot-keyed customer responses directly into my keyboard. It was pretty awesome. It saved 10 minutes per response, and gave the perfect response. It was pretty optimized, it was cool.

And then recently I spoke to John Jonas, who has outsourced every task to 17 different virtual assistants, in episode 86.

This really changed my perspective and evolved my business a major step further. I probably wouldn’t be spending time doing this podcast right now, if I hadn’t built out my customer support. I’d be answering tickets, and closing out those spam ticket responses.

I started looking at FreshDesk…

I created an account, setup my email forwarding, It was very solid, however I realized it still had one major issue:

How do I have customer support answer questions everyday without giving them access to my account’s sensitive data?

Now that is a golden question. And it took me over 10 months to figure out.

Freshdesk was great, because it offered centralized support tickets. I could thus forward emails all to one spot, and freshdesk would create support tickets out of each one.

The problem however was freshdesk was too general. It didn’t pull order information from Amazon or eBay. So I canceled my free trial of freshdesk and when onto querying e-commerce support desks, which led me to xSellco. And no this is not a promotion of xSellco, or affiliated to them in any way.

XSellco is pretty awesome, it pulls e-commerce data from both the e-commerce channels and aggregates them all into one spot. It’s like a freshdesk or helpdesk but for e-commerce.

Now that I have pulled the order # per email coming in, and the customer address, I can now get a virtual assistant to assist per customer order.

Now this led to the next part, and I really owe thanks and gratitude to John Jonas from episode 86, who mentioned to “create videos step by step on how you currently do customer service.”

It takes a lot of upfront work, but after that it gets easier.

Yes that is really time consuming. And a pain in the butt. But once you get it done, you have opened 2-3 hours per day every day. You have also untied yourself from the desk of the computer to do the brain thinking part of your business.

Once I had xSellco, driving support tickets from multiple channels, all in one spot, I knew I could automate the whole entire shindig.

This first process took about a week to feel comfortable with support tickets going all into one spot. I had to check to ensure that they were correctly being loaded, the data was accurate from the respective channels, including my websites channels.

Next I wanted to give my customers the same kind of customer support that I offered them, when I was giving customer support. I wanted to deliver the same experience, high quality experience. I converted the hot-key coined responses, made by me, and put them into templates specifying each customer response.

Create a master customer service sheet.

I then charted all my products, associated issues, and how to respond to each issue with the respective template. So basically all the virtual assistant would have to do is find a related keyword associated to the SKU, and select the template to use, specified in the master excel sheet of customer service.

Once that was set in stone, I waited for 10 tickets to come in. I then turned on a screen recorder, and recorded my screen and my voice into videos, going into each customer support ticket, showing exactly what I did for the virtual assistant to replicate.

I showed him how to refer to the master customer service sheet, and how to respond with which related template.

Then I also showed him how to create shipping labels using shipstation. This allows me to view all new outgoing shipments of replacements and print them all in one go each morning for shipment.

In addition to that I have setup USPS to do daily pickups, which is free, for anyone who did not know that. It is like having a USPS office at your house. You can set that USPS pickup to come daily for the next 3-4 months.

The cool thing here, not only is he helping me out tremendously, he is also responding to customers faster than me, by checking it more than 3x a day.

I am currently paying him $330/month, which in Bangladesh goes a long way. One cool thing about this is he is full time at $330/month. So he is not only helping me out with customer service, but other tasks around the businesses as well.

By the end of it, it probably took me about another week to finalize my customer support and make it very easy with 3 videos for my virtual assistant to learn fully how to do customer service for my current line of products, and easily adjust to new products as well.

Now, lets take a step back for a second. If your competitor goes down the route of hiring a full time employee to do this in the United States, it will cost them maybe $40,000 a year. Also keep in mind the office location, health insurance, and all the other headaches with having employees.

That’s a major advantage in scaling your e-commerce company.

The major lesson and golden nugget here is break down big problems into multiple small ones so that they become manageable.

There was one major problem: How do I not do customer service anymore and I broke it into two smaller problems:

How to have a virtual assistant do customer service for Amazon and beyond without access?

And then – how to teach customer service to a virtual assistant for many e-commerce products?

So, after all is said and done, I currently think this has been a huge game changer in terms of scaling my business. I can easily train more virtual assistants with the 3 videos I have, the master excel sheet matching skus to product complaints, and template responses.

It’s only been a few days since It’s been fully executed and I feel I have a lot more time on my hands to do more important things in my business such as:

Scaling facebook ad campaigns

Scaling amazon ad campaigns

Add more products to the product line

Focus more on scaling, rather than repetitive tasks.

Lastly, this allows me to not be constrained to my desk responding to support tickets every day within 24 hours.

I like this article a lot. It doesn’t say the most important thing. Although it says it took Amazon 20 years to double Walmart, it doesn’t say why. Jeff Bezos stuck in it for 20 years. He survived the tech bubble in the 2000s, and had 20 years of near zero profitability while scaling his company. The real golden nugget is, it takes time to build very successful companies. As much as we all want to build epic businesses, we need to acknowledge that it takes many years of Persistence and brilliant executions.

That’s all for now guys, David Aladdin out.

]]>How I will save 40,000, by automating my customer service on Amazon, ebay, Walmart Jet and beyond. - What’s up guys, today’s episode, episode 87, is on How I will save $40,000+ by automating the customer Service in my Amazon, eBay, Walmart, Jet,
What’s up guys, today’s episode, episode 87, is on How I will save $40,000+ by automating the customer Service in my Amazon, eBay, Walmart, Jet, and website support tickets. Today’s episode brings a huge golden nugget so stay in.

One of the hardest parts of running an e-commerce business is the customer support side. It’s not just a lot of work providing the best customer service possible, it takes a lot of the founders time, all the meanwhile you have to add more products, scale the marketing and grow to the moon.

I believe, if it wasn’t for the AmzSecrets show, I wouldn’t have gone this far to force myself out of the trouble that I was in. I would wake up each day, spend 1-3 hours checking eBay, checking Amazon, checking facebook channel, and then checking my email inbox for my website.

WHEW. It was a huge time waster in terms of founder energy. Every few months I would post in our facebook group, AmzSecrets.com/fb, how is everyone doing their customer support? And some people would say outsource, but not really go into detail.

The problem with spending even 1 hour per day on customer service is you really don’t know how those hours would be spent differently if you otherwise had them. Before this episode, I had hot-keyed customer responses directly into my keyboard. It was pretty awesome. It saved 10 minutes per response, and gave the perfect response. It was pretty optimized, it was cool.

And then recently I spoke to John Jonas, who has outsourced every task to 17 different virtual assistants, in episode 86.

This really changed my perspective and evolved my business a major step further. I probably wouldn’t be spending time doing this podcast right now, if I hadn’t built out my customer support. I’d be answering tickets, and closing out those spam ticket responses.

I started looking at FreshDesk…

I created an account, setup my email forwarding, It was very solid, however I realized it still had one major issue:

How do I have customer support answer questions everyday without giving them access to my account’s sensitive data?

Now that is a golden question. And it took me over 10 months to figure out.

Freshdesk was great, because it offered centralized support tickets. I could thus forward emails all to one spot, and freshdesk would create support tickets out of each one.

The problem however was freshdesk was too general. It didn’t pull order information from Amazon or eBay. So I canceled my free trial of freshdesk and when onto querying e-commerce support desks, which led me to xSellco. And no this is not a promotion of xSellco, or affiliated to them in any way.

XSellco is pretty awesome, it pulls e-commerce data from both the e-commerce channels and aggregates them all into one spot. It’s like a freshdesk or helpdesk but for e-commerce.

Now that I have pulled the order # per email coming in, and the customer address, I can now get a virtual assistant to assist per customer order.

Now this led to the next part, and I really owe thanks and gratitude to John Jonas from episode 86, who mentioned to “create videos step by step on how you currently do customer service.”

It takes a lot of upfront work, but after that it gets easier.

Yes that is really time consuming. And a pain in the butt. But once you get it done, you have opened 2-3 hours per day every day. You have also untied yourself from the desk of the computer to do the brain thinking part of your business.

Once I had xSellco,]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean18:11AS 86: How to Outsource Better – John Jonas uses 17 Virtual Assistants to Grow His Kingdom – CEO of OnlineJobs.phhttps://amzsecrets.com/outsource-better-john-jonas-uses-17-virtual-assistants-grow-kingdom-ceo-onlinejobs/
Tue, 02 May 2017 19:58:14 +0000http://amzsecrets.com/?p=6145https://amzsecrets.com/outsource-better-john-jonas-uses-17-virtual-assistants-grow-kingdom-ceo-onlinejobs/#respondhttps://amzsecrets.com/outsource-better-john-jonas-uses-17-virtual-assistants-grow-kingdom-ceo-onlinejobs/feed/0Today we're going learn how to outsource our businesses so we can take it to the next level. I’ve got John Jonas on the show, He’s the CEO of OnlineJobs.ph, the largest website for finding Filipino virtual workers, with over 250,000 Filipino resumes and over 100,000 employers from around the world using it. He works about 17 hours per week, choosing to spend his time with his family rather than working.
What you'll learn:
How to outsource tedious, repetitive tasks
How John Jonas build his foundational framework to grow his businesses
Strategies and plans he executes on
How much it costs to outsource
The country he uses to outsource work
Why to outsource to the Philippines
What John worries about
What led him to outsourcing
How he has grown his company and only works 17 hours a week
And much more!
Contact John:
http://onlinejobs.ph
DAVID ALADDIN: Great to have you on the show, John!
JOHN JONAS: Yeah, thanks for having me!
DAVID ALADDIN: So, can you take us to the beginning before your online successes, where did your journey begin?
JOHN JONAS: I graduated from college in 2004 and I had a job out of school for ten months. And I am a terrible employee. My only goal at that time was to quit my job, that was all I wanted! Because my wife, we had our little boy, he was about a year old, and my wife would call me while I was at work and just…she would say: oh, you just missed what he did, and this was so cute! And I hated it! I hated being away! And then I…working the job for me it doesn’t work super well. Like when there’s not an incentive to do good work, if I don’t make more money for doing good work, then I just don’t do good work. So…
DAVID ALADDIN: What job were you doing, if you don’t mind me asking?
JOHN JONAS: So, I graduated from college in computer science. I was doing programming.
DAVID ALADDIN: Very cool!
JOHN JONAS: It was fine. It was fine, whatever!
DAVID ALADDIN: So, that, you know, like… I went into engineering and I don’t do that anymore. And so, you know, those types of degrees take a lot of work and effort. Did you have any regrets going into college for all that and then just quitting?
JOHN JONAS: No, I don’t, because it set me up really well. I don’t do any programming now. When I quit my job, I still did programming for myself. It just wasn’t…it wasn’t until I realized…it wasn’t until I learned I can hire someone else to do it for me for very, very reasonable cost, that I realized that programming doesn’t make money. Marketing and sales make money. And if you do programming, you can’t do marketing and sales. It just…programming is just too consuming to allow you to do other stuff.
DAVID ALADDIN: It’s interesting that you said it because, you know, programming takes intense amount of time, and it’s not even…it doesn’t even lead up to the sale actually. And it seems like you figured that out right away, and you went straight to the sales. So, what sales did you go into?
JOHN JONAS: So, I’ve been running online businesses since I quit my job. And the stuff that I was doing twelve years ago, it doesn’t work today.
DAVID ALADDIN: What was that?
JOHN JONAS: It was kind of giving out schemes that actually worked. And I didn’t get rich with it, but at least I saw. I started making money with it pretty quickly. It was building websites and getting them into Google, and getting them to the top of Google, and…
DAVID ALADDIN: That was a big thing.
JOHN JONAS: Yeah, it was.
DAVID ALADDIN: Create a lot of neat sites and ranks for those keywords, those long-tale keywords.
JOHN JONAS: Totally! Or even like major, major keywords. I was ranking like number 1 or number 3 for like wrinkle cream or car insurance, or work from home, or home based business, or… I mean, there was so much stuff.
DAVID ALADDIN: How many websites did you have up at a given point at time, at the peak?
JOHN JONAS: A hundred thousand…
Today we’re going learn how to outsource our businesses so we can take it to the next level. I’ve got John Jonas on the show, He’s the CEO of OnlineJobs.ph, the largest website for finding Filipino virtual workers, with over 250,000 Filipino resumes and over 100,000 employers from around the world using it. He works about 17 hours per week, choosing to spend his time with his family rather than working.

What you’ll learn:

How to outsource tedious, repetitive tasks

How John Jonas build his foundational framework to grow his businesses

DAVID ALADDIN: So, can you take us to the beginning before your online successes, where did your journey begin?

JOHN JONAS: I graduated from college in 2004 and I had a job out of school for ten months. And I am a terrible employee. My only goal at that time was to quit my job, that was all I wanted! Because my wife, we had our little boy, he was about a year old, and my wife would call me while I was at work and just…she would say: oh, you just missed what he did, and this was so cute! And I hated it! I hated being away! And then I…working the job for me it doesn’t work super well. Like when there’s not an incentive to do good work, if I don’t make more money for doing good work, then I just don’t do good work. So…

DAVID ALADDIN: What job were you doing, if you don’t mind me asking?

JOHN JONAS: So, I graduated from college in computer science. I was doing programming.

DAVID ALADDIN: Very cool!

JOHN JONAS: It was fine. It was fine, whatever!

DAVID ALADDIN: So, that, you know, like… I went into engineering and I don’t do that anymore. And so, you know, those types of degrees take a lot of work and effort. Did you have any regrets going into college for all that and then just quitting?

JOHN JONAS: No, I don’t, because it set me up really well. I don’t do any programming now. When I quit my job, I still did programming for myself. It just wasn’t…it wasn’t until I realized…it wasn’t until I learned I can hire someone else to do it for me for very, very reasonable cost, that I realized that programming doesn’t make money. Marketing and sales make money. And if you do programming, you can’t do marketing and sales. It just…programming is just too consuming to allow you to do other stuff.

DAVID ALADDIN: It’s interesting that you said it because, you know, programming takes intense amount of time, and it’s not even…it doesn’t even lead up to the sale actually. And it seems like you figured that out right away, and you went straight to the sales. So, what sales did you go into?

JOHN JONAS: So, I’ve been running online businesses since I quit my job. And the stuff that I was doing twelve years ago, it doesn’t work today.

DAVID ALADDIN: What was that?

JOHN JONAS: It was kind of giving out schemes that actually worked. And I didn’t get rich with it, but at least I saw. I started making money with it pretty quickly. It was building websites and getting them into Google, and getting them to the top of Google, and…

DAVID ALADDIN: That was a big thing.

JOHN JONAS: Yeah, it was.

DAVID ALADDIN: Create a lot of neat sites and ranks for those keywords, those long-tale keywords.

JOHN JONAS: Totally! Or even like major, major keywords. I was ranking like number 1 or number 3 for like wrinkle cream or car insurance, or work from home, or home based business, or… I mean, there was so much stuff.

DAVID ALADDIN: How many websites did you have up at a given point at time, at the peak?

JOHN JONAS: A hundred thousand…

DAVID ALADDIN: Holy cow! That’s… I’ve never heard of that large number! I heard of four hundred, or thousand, and I was like you know, that’s intense.

JOHN JONAS: Yeah, I mean, we built software to build software to build websites. So, I mean… And you know, none of that, none of what we were doing works today. And I knew when I did it: this is a short-term thing. And there was other… Some of the….a lot of those keywords that I mentioned, were not part of that hundred thousand sites that we were built. Whatever! But the really good thing about that time period was I learned number 1) there was money to be made online, it could be done. Because at the time people were saying: oh, nobody’s making money online, everybody just going bankrupt. And I learned: no, it can be done. And I learned…I learned some legal stuff about how to make money. And then I learned: you have to learn more!

And so I started pushing until I figured out other things online, figured out other ways of marketing, I figured out paper click, and I figured out how to do some other kinds of advertising like Forums and Craigslist. And I just started realizing like you can drive traffic all these different ways to a website. And I realized I learned you can sell something online, you just have to learn how to sell, or how to provide value to people. And it works out, so… And when you combine those things, you know, how to sell, how to provide value and how to drive traffic, you know, it works. It works to making money.

DAVID ALADDIN: No, I am kind of laughing, because you went through the entire online entrepreneur experience going through the 2000s. Like, you know, you created tons of websites! I actually had a bunch of micro niche websites as well, you know, trying to rank for keywords. And then you went into Forums and Craigslist, any way you could figure out how to drive online revenue. And the biggest lesson that I think I’ve learned you’ve learned is that the short-term versus the long-term rewards, you know. You can notice it when you start creating these authority websites versus, you know, these niche websites.

JOHN JONAS: Yeah, that was a big deal for me because I really liked to create passive recurring revenue that I don’t have to be there for it and in the beginning, when I created these website and it made me $1500 the very first month, when I was first starting. I made $1500! And I was like: oh, my Gosh, this is going to make me money forever! And it didn’t. And I realized, you know, like some of that stuff isn’t great. And so I started learning other stuff. But what I learned at some point was creating these little websites, you still have to work again. Where if you create something that’s really valuable to people, you don’t have to do that work again hopefully.

DAVID ALADDIN: I agree!

JOHN JONAS: So, yeah, the long-term is such a big deal versus the short-term.

DAVID ALADDIN: When the Google update, I think it was the Panda update or there might have been other updates that just nuked all the websites. Did you…were you diversified before that? So you are? He’s nodding by the way for those listening.

JOHN JONAS: Yes, I was diversified. I had… I mean, that Panda Update took a business that was making me $45,000 a month and took like ten minutes a month into like 400 the next month. But I had a lot of other stuff going, so I was fine.

DAVID ALADDIN: So, what started working for you?

JOHN JONAS: What do you mean?

DAVID ALADDIN: When you started to pivot. There’s a pivot at some point from Google Ads. Well, I guess the $45.000 was working really well for you, but when did you start deciding this is not going to last forever, let’s start building something else?

JOHN JONAS: That is part of me. That’s how I am. I always want to build something else. I always wanted multiple things going, so that in case something dies I have something to fall back on. And so that business that was making me a lot of money at that point I hadn’t touched it in probably two years. I had guys in field running it for me. And so I had been working on other stuff. The other stuff that has been really, really good for me was teaching the outsourcing stuff, because that’s what I was using. I was using people in the Philippines to build all these business. They built all of it. And people… I was in a mastermind group and there we had a weekly call, and people just knew. They knew what was going on with me, because we talked about it. Everybody, all of us, talked about it. And so people were just asking every single week: “how are you hiring all these people in the Philippines, how are you doing it?” So, I started teaching that and that was another diversification. And then that has just grown and continued to grow because everybody wanted to know. So…

DAVID ALADDIN: Let’s go right into that.

JOHN JONAS: Okay.

DAVID ALADDIN: Where do we start? Like, let’s say we have an e-commerce business. What do most of us tend to outsource?

JOHN JONAS: So, let me tell you a story. I have a fourteen year old son. Three years ago he was eleven and he came to me saying: dad, I think we can make money doing this. He gets obsessive with things. So, he wanted to buy a motorcycle. So, he’s looking on a local classify like Craigslist, and looking to himself a motorcycle. And at some point he realizes: wait a minute, I think I can buy motorcycles and sell them here. So, he comes to me and I was like: dude, that is not easy, like that’s so much work for me, you are eleven, right? So, he wanted and wanted to start a business, so finally I have him an Amazon training course because my only option was either to discourage him from entrepreneur or help him set up a business. So, I have him an Amazon training course and he just ate it up. Every day after school he’s watching these videos. And he goes through the whole thing, and like goes through…does everything they say.

So, he comes to me with a big spreadsheet, and I taught him how to use Google Docs, and he comes to me with a spreadsheet of like: here are these products that I found and this is the one I think we should do. And I said: no, that’s a terrible idea. This one doesn’t work. This one doesn’t work. This one doesn’t work. That one is okay. That one is pretty good. This one doesn’t work. And I went through it and told him. So, he agreed on picking a product and we went and sourced it in China, and I helped negotiate with them, and I funded it, and he gets those products and starts selling them on Amazon. And he writes a description, and I modify it for him, because he was 11, you know? And that product is still selling stuff on Amazon today.

So, for the past years my son has this business running on Amazon. But he’s 11,12,13,14, like he’s brain dead. So, instead of him doing the work, because he just ignores crap, I have a guy in the Philippines who’s doing the work for him. So, like, requesting feedback from people… I don’t even know how any of these stuff works on Amazon, because I don’t deal with them, but he requests feedback. Any time get a question from a customer, he answers it, or whatever they do. Any time our inventory gets low, he let me know, so I can go and get more inventory. Any time there’s a problem with our listing or with, you know…with Amazon, there’s always problems, whatever, he deals with it and takes care of it. He contacts Amazon and chats with them, and does whatever he needs to do. So, and then I gave him the same course and he comes to me with ideas of like: hey, we can sell this along with this, you know. So, that’s… There’s a little bit of my e-commerce experience with outsourcing.

DAVID ALADDIN: It is crazy that… Is he still 11 or how many years ago was this?

JOHN JONAS: He’s 14, so this was three years ago. He’s 14.

DAVID ALADDIN: Feel like he’s ahead of the game.

JOHN JONAS: And he is selling dirt bikes today, and he makes good money doing it.

DAVID ALADDIN: The margin has to be pretty good. I mean, those are bigger sized objects. Not everyone wants to do that, but then…

JOHN JONAS: The margin of what he’s selling isn’t great, but it is fine, it is good. I mean, the kid is 14 and doesn’t have to do anything to make money, it’s ridiculous.

DAVID ALADDIN: So, what other kids at school say?

JOHN JONAS: They actually don’t know. They actually don’t know that he makes good money. One of them… I heard kids one time saying to each other: you know, Austin is not rich, his dad is, but he doesn’t have any money! Well, they don’t know, you know, they don’t know much he makes.

DAVID ALADDIN: He just sold 500 bikes two weeks ago-not a big deal, he’s not rich!

JOHN JONAS: Yeah, right… So, anyway…

DAVID ALADDIN: That crazy! Okay, so, let’s say like…so, let’s say if I have a website, like an authority website and you know, I want to grow the organic traffic on it. How would I go about getting someone to create articles on the website? Is there an easy process to through and teach them how to do that?

JOHN JONAS: So, can I make a distinction before I answer that.

DAVID ALADDIN: Go ahead!

JOHN JONAS: That was back years and years ago. That was one of the very first things that I wanted to do, was…I wanted to have someone else create articles, and either for my website, or for other websites, and post them in LinkBack. And what I found was I went to oDesk, which is now UpWork, and I had someone to create these articles. And they created the articles and sent them back to me. And the minute I got the e-mail from them was the minute I realized: this doesn’t work for me. I don’t even care what these articles are, this doesn’t work for me. Hiring a freelance worker does not let me run my business, it makes me…it forces to work in my business.

So, what happened? I get these 50 articles back from this person and now I have to go check them and make sure that they are not plagiarized, and I have to go modify them to have links in them, I have to go publish them to websites or publish them to my website. And it all felt down back on me. And I was so frustrated because that contract worker, I can’t teach them to like do this over and over, and over again over time, which is really what’s needed if you are going to be publishing articles, right? Because on UpWork their goal is to finish their job, get feedback and get another job, because that’s how the system works, that’s the incentive there.

So, and it took me a while to figure out how to hire someone in the Philippines full-time where they work for me, and this is their full-time job, is just working for me. And I went through that entire process again, but this time I had them write the article. They work for me, so they don’t have incentive to plagiaries it, because I’m going to pay them regardless, so we’ve never…I’ve never had a plagiarizing problem. And then I thought them how to publish the article wherever it is, whether it is on my site, or another sites, and I taught them how to create the links in the article and I taught them how to do the headlines that work really well, and I taught them how to do the photo boxes.

So, it was just a matter of getting the right employment situation setup where that process I have never done it once…I haven’t done it like once in nine years. But it gets done every single day. Because I hired someone full-time and they work for me, and that’s their job, is just to do that, just to write content and publish it.

DAVID ALADDIN: It’s awesome!

JOHN JONAS: And if you found out content, you would not know that I hadn’t written it because it’s so well done!

DAVID ALADDIN: What’s the person that you use? I want their number?

JOHN JONAS: That’s not reasonable!

DAVID ALADDIN: I know…

JOHN JONAS: So, here’s what I found was I can have a full-time person in the Philippines for $400 a month.

DAVID ALADDIN: Pretty good!

JOHN JONAS: Full-time! And at the time it was actually like $250. So, today it’s a little bit more. It’s more expensive than it was ten years ago. And you can find people with flawless English who are perfectly capable of writing whatever you want them to write. And from there, it’s just a matter of you teaching them. You teaching them your style of writing, or you teaching them your style of publishing, or your style of social media posts. So, for me today, I have 21 people who work for me in the Philippines. They all work full-time. I have a person who just handles social media, that’s all she does. I hate Facebook!

DAVID ALADDIN: I do too!

JOHN JONAS: I hate it!

DAVID ALADDIN: I hate it too!

JOHN JONAS: It’s the biggest time-suck ever and we have 130,000 likes on our Facebook page and they are all legitimate. She’s never done anything like buying likes or anything done like that.

DAVID ALADDIN: That’s awesome!

JOHN JONAS: And I’ve never made a single post there, so… I have a girl who just writes content for her. And they are both really good at that. I have customer service people. I have admin people. I have graphic designers. I have HTML TSS people. I have programmers. I have a HR person. I have…what else? I have another couple of writers. So, I have all these people that they make between $400 and $1100 a month for full-time work in the Philippines and it lets me live a lifestyle that’s different than most people’s.

DAVID ALADDIN: That’s incredible! Are they all situated in the same office? Or they diverted all over the Philippines?

JOHN JONAS: All over the country, yeah, they are all over the country.

DAVID ALADDIN: I am guessing you have like a virtual assistant manager of all these different tasks?

JOHN JONAS: So, for me, what I try and do is I try getting people doing things that they can do over and over again. So, like the customer service people-we just train them and they do the customer service. I don’t ever see anything. I have a business partner who handles that staff. So, there’s two of us. The social media and blogging people report to me, but like I never spend more than five minutes of the day with them because they are just, you know, there are intelligent, they are smart people, they don’t…I am not doing anything for it, for social media or blogging, they just do it themselves. The programmers report to me and my business partner, and so, we’ll work with them on things, but really that working is just thinking and that’s what I do today. And that what I would hope that your listeners can get to, just thinking. Where we have a feature we want to build, I think through it. I think through everything about it, like all the little details if it-I think through it. And then I tell someone else to implement it and get it done how I want it done. And there are multiple people usually involved in that, but… So, they report to me. The webmaster dude reports to me, which is fine. HR person reports to me, but like there’s just not much to do there, you know. So, I only work a couple hours a day. I don’t know if you are looking at my sweet sunburn, but I have racoon eyes, because I skied yesterday and didn’t work, because I…

DAVID ALADDIN: I keep getting the feeling that you are in the Philippines, but you are actually not there currently, right?

JOHN JONAS: I’ve only been there once and that was six years ago, and I took my family there on vacation for five weeks. I am in Utah

DAVID ALADDIN: Alright! This is cool! I love where this is going! I am thinking how to assign each person…I am thinking of building my own virtual army, like you have done. What does the HR person do specifically, or like how does that person fit in?

JOHN JONAS: So, she doesn’t actually do standard HR. She does recruiting for us. And she’ll recruit for our business, which is very, very little, but really she recruits for customers, because we have customers that want it. I don’t like that… I don’t even want to talk about that, because that’s not part of my business.

DAVID ALADDIN: Okay, I was wandering like do I need a HR person?

JOHN JONAS: No! You do not need a HR person, here! Okay, so let me go back and if people want it, let me talk for a minute about how to best implement this. So, I’ve done a lot of podcast and I am going to use you as an example as in podcasting, and I will give them an e-commerce example. So, if you are going to do this, if you are going to hire someone, number 1) you are going to hire in the Philippines, and only the Philippines, because there are some very specific cultural things that make all the difference in the World, from the Philippines versus anywhere else in the World. So, you are going to hire one person and you are going to teach this person how to do something you know how to do.

So, you are going to hire them to do something you are currently doing. So, most people when they teach and they are like: oh, make a list of things that you can get someone else to do and things that you know how to do. And I think that’s wrong. I think the very first thing to do is find something you are doing that you are good at, then you can teach someone else to do. So, maybe that’s editing audio for podcasting, maybe it’s editing “ums” and “uus” out of an audio, or maybe it’s cutting off the end and the beginning, and adding bumpers onto it, right? So, you know how to do it, you have your own style, but you are going to hire an audio editor in the Philippines, probably part-time, I don’t know how often you do it, but maybe full-time, and then you are going to teach them how to do it in your style.

So, you are going to give it to them, they are going to send it back to you the first time, and it’s not going to be what you want. You are going to be like: oh, man, is this even going to work? Which…this is what I’ve been through, I’ve been this a lot of times! And then you are going to say: hey, so, I like what you did here, but I want this like this, and like this, and like this. And let’s work through this specific stylistic peace, right? And you are going to teach them to do it how you want it done. It’s going to take you couple of weeks. A couple of weeks of teaching and training, which if you would have done the work yourself, it would have been a lot faster. But that’s not the point, the point is after three weeks of doing this, you’ll never do it again!

DAVID ALADDIN: So true!

JOHN JONAS: And they’ll do it for you every single time forever. So, in an e-commerce situation, and I am not in this, so I don’t know the in-s and out-s, but within an Amazon business for example. I am guessing it requires to do this really well and really big, you’ve got to have multiple products. And you probably are constantly finding new products and sourcing new products. So, you teach someone in the Philippines how to find new products.

They are not going to make their final decision on yes, this is the product to do, but they are going to do all the research for you. And you are going to teach them, here’s what I look for when I do a research. You are going to make a video of yourself doing research, talking to that person, saying: hey, here’s Amazon, here’s what I am looking, I am looking for this numbers sales, I am looking for this, and this and this, I am for this, whatever that research is; when you find the product that you think is good, I want you to come over here in Google Docs and put it in this spreadsheet for me.

So, you are making a video, talking to them, so that they can see exactly what you want. And then, when you have some products, you are going to come to me and say: hey, here’s the list of products, I think these will work well, but I want you to make the decision, and that’s a really big deal! Is people often, when they are outsourcing like this, they want to like completely walk away from crap. You can’t do that! You still have to be the CEO. You are still the end doll. You are still the decision-maker. So, when that Pilipino comes to you with a spreadsheet of twenty of fifty different products, you have to make the decision. They can give you all the metrics they want, but you have to be the decision-maker.

DAVID ALADDIN: What do you do in terms of… You’ve got these 17 virtual assistants, not all of them report directly to you, but how do you organize them all? Like, what tools are you using?

JOHN JONAS: So, okay, that’s a really good question! I require communication from each of my people every single day. And so, we use BaseCam as a project managing system. But for a lot of year, I just used e-mail, you know? Like, there’s just not…there’s not that much going on to require project managers. And especially if you are just starting, you know? Maybe just use e-mail. What you don’t do is talk to them on the phone. I am serious! In the Philippines they don’t want to talk to you on the phone. They’re scared. There’re scared of you. Not that they are scared of you, but they call it shy, they are shy, and they are scared that you will understand them and so they’ll be embarrassed by their English. They know they will understand you, because they watch American TV, or American movies. But they are worried that you won’t understand them. I’ve had very varied conversations with them. I had a programmer once who I talked on the phone with because…and I thought I hadn’t talk to him, because this was…what we were working on was so urgent, and I could barely understand a word he said. Dude’s the best programmer I have ever met! He’s amazing! But I could not understand his spoken English. His written English is fine, no issues, right?

JOHN JONAS: Now, other people, I’ve talked to them on the phone, they were super hesitant to talk to me, and their English was flawless. So, if you can avoid it, don’t talk to them on the phone. Use e-mail or Skype, chatting, or Instant Messenger, or Slack, or something else, written communication, you will just do a lot better with them. So, for me, we use BaseCam, e-mail or Slack.

DAVID ALADDIN: Of all the task that you’ve outsourced, what do you think was the most impactful for your business?

JOHN JONAS: The most impactful was definitely getting rid of programming for me. Like, hiring the first programmer, which I waffled back and forth for months on, a way back, 11 years ago, and I had this reference from someone. This guy told me…because I’d only done oDesk, or hired local business people. And this guy who is very well…I respect a lot, he said: hey, John, when you are ready to outsource some of this stuff, make sure you go to the Philippines with it. And I was like: what? That weird! He said: yeah, because in India when you tell them something and they say yes, that means: yes, I heard something to come out of your mouth. It doesn’t mean: yes, I understood what you’re said. And, you know, when I heard that I was like: well, that’s different, you know. But it kind of gave me a little bit of hope, because I had hired people in India before and just had not a good experience, which is I think why most people consider outsourcing problematic. Because in the US we just consider: oh, yeah, go to India. And it’s hard. It’s hard because the cultural difference’s so great! And…I lost my thought!

DAVID ALADDIN: Can you combine mixtures of like automation? Like let’s say like a social media automation with your virtual assistants? Or do you just have them posting?

JOHN JONAS: Both!

DAVID ALADDIN: Yeah?

JOHN JONAS: Both! I love that! Yeah, so actually, I was just working on that before we talked. One of my virtual assistants who does social media just asked for…she asked to use DrumUp for her content creation. I was like: that’s fine, totally, yeah.

DAVID ALADDIN: Haha! Do it!

JOHN JONAS: And we use (inaudible) and I don’t know, I don’t even know what else. I don’t know what she’s using. But we use software automation with our people automation, yeah.

DAVID ALADDIN: Sometimes I find that software it kind of makes your social media pages like hand to become inhuman, not inhumane but just too dry. Maybe it’s the content the things that’s dry. Could be.

JOHN JONAS: I don’t know, man, I don’t deal with that.

DAVID ALADDIN: You have 150.000 likes, so you guys are doing something correct over there.

JOHN JONAS: I don’t even know what she does. I don’t know. But so, here’s the thing: I don’t like Facebook and so I don’t want to do…I don’t want anything to do with Facebook. So, years ago this girl, she’s coming to me saying: hey, we should be marketing on Facebook! I was like: no! Hey, we should be marketing on Facebook? No! I don’t want to be on Facebook! I don’t know how to do it! I don’t understand it! I don’t like it! So, she comes to me with a plan saying: hey, I want to market on Facebook, here’s what we are going to do, here’s the things… I was like: ah! You send me a whole bunch of different posts that you are going to make, because here’s one of the things that I’ve learned: when you are outsourcing and you’re dealing with a foreign person interacting with a US person in a marketing setting, like a sale setting, it’s not great. And that’s the one limitation that I have with this, is that they can write…we’ve listed…we’ve done couple different Amazon products. I’ve had them write the content for the description, but it always comes back to me to edit it and make it really great, right?

So, for social media, I was very, very hesitant to have her posting social media stuff which was the plan. And I didn’t want to do it, so I just keep saying no. Finally she was like: here’s what I am going to post, here’s post 1, 2, 3, 4, 5, and I was like: okay, I am going to modify these slightly, and I am going to send them back, like here’s what I modified and why I modified it. And then, over time, after a little bit of doing that, she got really good at it. And so, I’ve never done it again. And so, that’s kind of…the point of that was there’s a lot more than you think you can get done when you hire correctly.

So, I hired this girl because her English was fantastic. And usually really, really amazing English, like perfect English, indicates someone’s intelligent in the Philippines. And she ends up doing this…you know, coming to me with this idea and we end up, you know, building this huge social medial following.

DAVID ALADDIN: One of the things… I actually have a few virtual assistants. One of the things I guess I have difficulty and I think you pointed it out, was that you find very repetitive tasks where’s I think one of the issues with mine I have like a generic virtual assistant that kind of continues to request new tasks, then actually takes up some time. So, I think one of the golden nuggets that you actually presented was assigning a VA per tasks. Like, you are writing content, are they creating the titles for you, or do you have to create list of titles that you want so that they understand the CEO side of it?

JOHN JONAS: No, they come to me with the ideas now, now, so, this is really important with the Philippines, I don’t know where your VA is. With the Philippines in the beginning you have to teach and train them, you have to provide the titles. They are too scared to disappoint you to be willing to do it on their own. Over time though, they will start doing that on their own. So, like my team, if they are doing blogging, they come to me all the time with: here’s a topic I think we can write a blogpost about, and I am like: ah, I don’t like it, no, or: yeah, that’s great, go ahead, do it! Right? But if you are not willing to spend the time in the beginning creating the training, giving them feedback, what will happen is they’ll disappear. And so, someone disappearing, you know, it’s because they are stuck on something, they are embarrassed, they are shy, they are scared, they are scared about letting you down. If they disappear in the Philippines, it’s not because they don’t want the job. So, that’s the biggest problem people have.

DAVID ALADDIN: So, basically I’ve got to create the framework from the start. Just take a day and create solid, foundational frameworks for each virtual assistant and then give them all freedom. And if they leave, I can always replace them.

JOHN JONAS: No, that’s the wrong attitude towards it…

DAVID ALADDIN: Okay…

JOHN JONAS: Filipinos don’t leave. That’s one of the really great things about the Filipinos, they don’t leave. As long as you treat them well, they are loyal to a fault.

DAVID ALADDIN: I am actually half-Filipino by the way.

JOHN JONAS: Are you?

DAVID ALADDIN: Yeah!

JOHN JONAS: They are loyal to a fault! So, like as long as you treat them well and they don’t feel like that you are embarrassing them or that you are disappointed in them, they’ll never leave. They’ll just keep working for you, which is, the Filipinos, is amazing, it’s an amazing culture! So, if your idea is: if they leave, I can replace them, you are not going to have tons of success with this. The idea is: I’ve recruited them well, I know you’re talented, if you are leaving, it is my fault, not your fault.

So, if they leave, if they quit…if they tell you they are quitting, there may be a different story, but if they just disappear, that’s your fault 98% of the time. And I’ve seen this hundreds of times where it’s the employer’s fault, not the worker’s fault. Your instructions weren’t as clear as you think they were. You didn’t provide feedback. You didn’t support them. So, just be prepared to support them and give them feedback, and be there. It’s not a matter of I have to spend a full day and then I am done. It’s: I am going to them a task and they are going to e-mail me back, and then I am going to e-mail them back, and they are going to have a question, and I am going to solve it for them. And as you do that more and more, you just gain more and more time.

DAVID ALADDIN: I am actually getting a lot of ideas for virtual assistants right now.

JOHN JONAS: Good! That’s awesome! I love it!

DAVID ALADDIN: At least ten or twenty of them!

JOHN JONAS: Good! Great!

DAVID ALADDIN: Okay, so…

JOHN JONAS: My…

DAVID ALADDIN: Go ahead!

JOHN JONAS: My advice: hire one! Start with one!

DAVID ALADDIN: No, yeah, you know, I have like four or five. Managing them is not too bad. I use Skype, you know. I tag…I mean, I have their name and a tag with what they do. And they ping me whenever they have any issues or request new tasks. The problem I think I have is just giving them a more repetitive task rather than just a generic task one by one. Queuing them up for more tasks. I think I need a figure out a good way to do that too.

JOHN JONAS: Are these hourly people?

DAVID ALADDIN: Yeah, yeah…

JOHN JONAS: Try getting them off of hourly and paying them full-time, a set, fixed, monthly salary.

DAVID ALADDIN: And then so if you don’t fill their tasks, you are pretty much still paying them, correct?

JOHN JONAS: Yeah, it will change your brain. If you get them off of hourly. This is, for me, this how you live a better lifestyle. Hourly is fine as long as you just want to keep working your but off. But when you want to change your lifestyle to working less and getting them working more, pay them a fixed salary, because what will happen is your brain is going to start saying: oh, I need to keep them busy, what problems can I solve with them? What can I do? What am I doing that I can have them… Hey, wait a minute, I am doing this thing every day, they could do this thing for me! And you start getting tasks off of your plate if they are fixed salary.

DAVID ALADDIN:I like that tip! It’s a very good tip! I am going to experiment with it and see what happens. It’s only $400, right?

JOHN JONAS: Right! Yeah! And it is like $3 an hour. If they are not busy full-time, it is okay, you know. But it will at least force your brain to work in a different way, more like a CEO and less like a grunt worker.

DAVID ALADDIN: So, what keeps you up at night? What kinds of issues do you have?

JOHN JONAS: Nothing! I sleep amazingly well at night!

DAVID ALADDIN: It’s impossible!

JOHN JONAS: I am serious! Yeah, I am serious! I sleep eight hours every night and I sleep super well!

DAVID ALADDIN: You mentioned that you just do the thinking in your business. Do you do any other tasks that you actually like to do or you’ve completely killed all tasks?

JOHN JONAS: I really like to ride my bike with my wife and I like to ski with my wife. And I like to run and swim with my wife. And I like to play hockey with my son. I mean, I have to work, because otherwise you get bored. I’ve been at the four-hour work week and it is not enough for me, I get bored. But I work all seventeen hours a week and all I do is just look at what my team is doing and give them feedback. I never touch websites anymore. I don’t touch content. I don’t touch social media. I don’t touch anything.

DAVID ALADDIN: Looking back, do you think about your IT job and if you ‘d stuck with it, where would be at right now?

JOHN JONAS: Nope, I never do that!

DAVID ALADDIN: Do you have any like old employees that like reach out to you and what…do you say anything to them?

JOHN JONAS: People from the Philippines, yes, although…

DAVID ALADDIN: No, you IT job?

JOHN JONAS: Oh! I got people that worked with me that reach out sometimes, yeah. I have a college roommate that reached out to me a couple of months ago and be like: hey, I need help. And I am always willing to help! I will help!

DAVID ALADDIN: Do you have like any local employees at your place? Or is it a completely, fully… Aside your business partner.

JOHN JONAS: I have a business partner who is in Idaho and I have content writer who is in Idaho, who is…she’s just an amazing sales/marketing person. That’s it! And actually I had a US company doing my paper click and I was really happy with them, and so I hired someone in the Philippines to manage all of our ad words and Facebook, and AdRoll, and Bing, and whatever paid marketing that we are doing, and it’s awesome.

DAVID ALADDIN: Wow!

JOHN JONAS: It is super expensive.

DAVID ALADDIN: Is it?

JOHN JONAS: $12 an hour is like by far the most expensive person in the Philippines I’ve ever paid.

DAVID ALADDIN: So, I guess one of my concerns is handing over the credit cards and stuff like that. I mean, your ads spends can be thousands of dollars, right?

JOHN JONAS: Yeah, I actually spent like $50,000 last month.

DAVID ALADDIN: Yeah, and so, you know, what…do you have any like… Is it dangerous?

JOHN JONAS: Yes, I do. I did. I did when I’ve started. So, one of the really awesome things about the Philippines is they are honest. And not everybody is honest obviously, but once you have recruited well, you will find that person will try really hard to be honest with you. And so, they are honest to the point where my guys in the Philippines have access to my PayPal account, they have access to my credit cards, they have my personal e-mail account.

DAVID ALADDIN:…which makes me nervous!

JOHN JONAS: Totally! That should make you nervous, that’s good! But you should try something and see what happens with your Filipino virtual assistant, and see. Like, they have route access to all of our servers. I have helped…I want to say I’ve helped 20,000 employers around the World hire 50,000 Filipino workers. Once did I hear of a Filipino stealing something from an employer and that employer had them do a bunch of work and they didn’t pay them, so they were just trying to get paid? It’s not the Filipinos culture to steal from you.

DAVID ALADDIN: I guess that helps of letting go of that fear, you know.

JOHN JONAS: Plus, credit cards? If they would have to steal something from your credit card, what do you do? You call your credit card company and say: hey, this is an unauthorized purchase.

DAVID ALADDIN: Okay, final thoughts! What can we take out from all of this? There’s a lot that you’ve mentioned. We can horn on one spot, what would leave our audience with?

JOHN JONAS: The biggest thing is to try it, is…like what I describe is my experience. It is also, you know, thousands of employer’s experiences. But it doesn’t work for some people. I recently had a dude who came to me and said: hey, I want to hire someone. And we don’t do any hiring for people. I own the marketplace for finding these workers, www.onlinejobs.ph is the place. There’s a hundreds of thousands of Filipinos resumes and as you go on is just like www.careerbuilder.com or www.monster.com . You post your job, they’ll apply to your job and you contact them directly. We are not involved in that process. But I had this employer comes to me and say: hey, I want to hire a virtual assistant, I am ready for this!

So, he got a really good virtual assistant. I know the person he hired, which is super rare, and I know they are talented. They lasted one day with him, because… And he e-mailed me back: oh, this isn’t going to work, I said this and it didn’t get done right, and I am done, this doesn’t work! I was like: dude, you didn’t even attempt! Like, you didn’t event…You had 0 patience at all! You are right! This is not going to work for you! This is not a magic bullet, quick fix, I suck at managing people kind of thing!

This is… You are going to have patience and work with these people over time and they are going to work for you for years as they help your business succeed, and you are going to help them succeed in life. But to find out that’s you or not…because that’s me, to find out if that’s you or not, you got to hire someone! You have to try it and see does that work for me.

DAVID ALADDIN: How can people contact you?

JOHN JONAS: Yeah, as I said before, I am not a fan of social media. But if you contact on social media and you ask for me, it will get to me, but I am not going to be the first person to see it. Also, I am super available through e-mail. So, if you are using any other contact us links on www.onlinejob.ph and you ask for me, it will get to me. I won’t be the first person to see it, but it will get to me. So, if you need help, or you want to advice, 100%, ask me, through e-mail, and I will be totally willing to help.

DAVID ALADDIN: A virtual assistant will let you know.

JOHN JONAS: That’s right! They will send it to me.

DAVID ALADDIN: Yeah, they will read it first and make sure it’s a good lead. Alright, thanks for coming on the show! We appreciate your time! David Aladdin, John Jonas: out!

]]>Today we're going learn how to outsource our businesses so we can take it to the next level. I’ve got John Jonas on the show, He’s the CEO of OnlineJobs.ph, the largest website for finding Filipino virtual workers, with over 250,

What you'll learn:

* How to outsource tedious, repetitive tasks
* How John Jonas build his foundational framework to grow his businesses
* Strategies and plans he executes on
* How much it costs to outsource
* The country he uses to outsource work
* Why to outsource to the Philippines
* What John worries about
* What led him to outsourcing
* How he has grown his company and only works 17 hours a week

DAVID ALADDIN: So, can you take us to the beginning before your online successes, where did your journey begin?

JOHN JONAS: I graduated from college in 2004 and I had a job out of school for ten months. And I am a terrible employee. My only goal at that time was to quit my job, that was all I wanted! Because my wife, we had our little boy, he was about a year old, and my wife would call me while I was at work and just…she would say: oh, you just missed what he did, and this was so cute! And I hated it! I hated being away! And then I…working the job for me it doesn’t work super well. Like when there’s not an incentive to do good work, if I don’t make more money for doing good work, then I just don’t do good work. So…

DAVID ALADDIN: What job were you doing, if you don’t mind me asking?

JOHN JONAS: So, I graduated from college in computer science. I was doing programming.

DAVID ALADDIN: Very cool!

JOHN JONAS: It was fine. It was fine, whatever!

DAVID ALADDIN: So, that, you know, like… I went into engineering and I don’t do that anymore. And so, you know, those types of degrees take a lot of work and effort. Did you have any regrets going into college for all that and then just quitting?

JOHN JONAS: No, I don’t, because it set me up really well. I don’t do any programming now. When I quit my job, I still did programming for myself. It just wasn’t…it wasn’t until I realized…it wasn’t until I learned I can hire someone else to do it for me for very, very reasonable cost, that I realized that programming doesn’t make money. Marketing and sales make money. And if you do programming, you can’t do marketing and sales. It just…programming is just too consuming to allow you to do other stuff.

DAVID ALADDIN: It’s interesting that you said it because, you know, programming takes intense amount of time, and it’s not even…it doesn’t even lead up to the sale actually. And it seems like you figured that out right away, and you went straight to the sales. So, what sales did you go into?

JOHN JONAS: So, I’ve been running online businesses since I quit my job. And the stuff that I was doing twelve years ago, it doesn’t work today.

DAVID ALADDIN: What was that?

JOHN JONAS: It was kind of giving out schemes that actually worked. And I didn’t get rich with it, but at least I saw. I started making money with it pretty quickly. It was building websites and getting them into Google, and getting them to the top of Google, and…

DAVID ALADDIN: That was a big thing.

JOHN JONAS: Yeah, it was.

DAVID ALADDIN: Create a lot of neat sites and ranks for those keywords,]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean47:59AS 85: These CEOs are disrupting Amazon PPC by Fully Automating it – Prestozonhttps://amzsecrets.com/85-ceos-disrupting-amazon-ppc-fully-automating-prestozon/
Thu, 27 Apr 2017 20:25:03 +0000http://amzsecrets.com/?p=6118https://amzsecrets.com/85-ceos-disrupting-amazon-ppc-fully-automating-prestozon/#respondhttps://amzsecrets.com/85-ceos-disrupting-amazon-ppc-fully-automating-prestozon/feed/0Forget excel sheets! Ben, Chris, and Dana are Amazon sellers from San Francisco who got frustrated managing PPC by hand and set out to automate the whole process with Prestozon. The founders met at our last company which was a supply chain finance and einvoicing company targeting large enterprises. As the company grew we decided we wanted to be on a smaller team again and set out to sell on Amazon and use our software and data backgrounds to automate the process where possible. We launched our first product ASAP (and made a bunch of mistakes) so we wrote software to help us find a better product to launch. Once we started doing PPC for our products we were amazed nobody had a good solution for handling it, so we set out to write Prestozon to automate the whole process. We did this while Dana and I were traveling in Asia (China, Sri Lanka, Bali, and Thailand) and Europe and we're 100% bootstrapped.
What you'll learn:
How Prestozon was founded
Why they started Prestozon
How to optimize your Amazon PPC
How to decrease Amazon ACOS
How to increase ad spend and profits
How to tweak product advertising settings
Techniques to improve your Amazon advertisements
Negative keywords and how they affect Amazon ppc
And much more. Show notes coming shortly.
Get in touch with Dana,Ben and Chris and learn more:
http://prestozon.com
https://www.facebook.com/prestozon/
DAVID: Great to have you on the show, guys.
BEN: Thanks.
CHRIS: Thanks. Good to be here.
DAVID: Can you guys take us in the beginning before Amazon, where did each of your journeys start?
BEN: We actually all met at the same company building Enterprise Finance Software and we wanted to do another kind of smaller thing and we all decided to get into Amazon FBA.
DANA: Yeah, we’ve all worked in software for most of our careers. All that you…
CHRIS: Yeah.
DANA: And we started in Amazon and then we then realized that Amazon software space is… there’s a lot of tools that weren’t available yet, so were like, all right, sound great. Like, we need these tools as sellers and we love building software so it’s kind of natural fit.
CHRIS: Actually, we started from a different perspective first, so in FBA. We actually have this idea, like we want to start it automating from the scratch, so we actually built a market analyzer to figure out like if we start like what would be the best products to go with and that was kind of like our first attempt. But then, pretty soon, after we’ve figured out that there are a lot of other steps in between too that have gaps in how the tools work right now over this availability to make it easier for you as a seller. So we basically just started working our way through that.
DAVID: At this enterprise companies, I'm guessing it was a corporate sell company. How many employees were, was in that company?
BEN: Actually it was a start up. We… I joined when there were 60 people.
CHRIS: I joined when there were 30, but when we left it was…
DANA: Yeah.
BEN: 200?
CHRIS: ... 250 or more?
BEN: Yes. It was still a small company but…
DAVID: Right.
DANA: The Company’s name was Taulia and it’s enterprise because we built software for the largest companies in the world. So, Coca-Cola, like Home Depot, I don’t know.
CHRIS: Pfizer.
DANA: Pfizer. So we built software to handle their financial electronic invoicing. Payment. We handled like massive, massive data and they’re like really secure conditions so that set us up well to deal security with Amazon data.
DAVID: And was that like your guys’ first gig right out of college or just, you just went right into it?
DANA: Oh no.
CHRIS: No. I actually started working for a software company in Asia first. I'm originally from Germany as you can probably tell from my accent.Forget excel sheets! Ben, Chris, and Dana are Amazon sellers from San Francisco who got frustrated managing PPC by hand and set out to automate the whole process with Prestozon. The founders met at our last company which was a supply chain finance and einvoicing company targeting large enterprises. As the company grew we decided we wanted to be on a smaller team again and set out to sell on Amazon and use our software and data backgrounds to automate the process where possible. We launched our first product ASAP (and made a bunch of mistakes) so we wrote software to help us find a better product to launch. Once we started doing PPC for our products we were amazed nobody had a good solution for handling it, so we set out to write Prestozon to automate the whole process. We did this while Dana and I were traveling in Asia (China, Sri Lanka, Bali, and Thailand) and Europe and we’re 100% bootstrapped.

DAVID: Can you guys take us in the beginning before Amazon, where did each of your journeys start?

BEN: We actually all met at the same company building Enterprise Finance Software and we wanted to do another kind of smaller thing and we all decided to get into Amazon FBA.

DANA: Yeah, we’ve all worked in software for most of our careers. All that you…

CHRIS: Yeah.

DANA: And we started in Amazon and then we then realized that Amazon software space is… there’s a lot of tools that weren’t available yet, so were like, all right, sound great. Like, we need these tools as sellers and we love building software so it’s kind of natural fit.

CHRIS: Actually, we started from a different perspective first, so in FBA. We actually have this idea, like we want to start it automating from the scratch, so we actually built a market analyzer to figure out like if we start like what would be the best products to go with and that was kind of like our first attempt. But then, pretty soon, after we’ve figured out that there are a lot of other steps in between too that have gaps in how the tools work right now over this availability to make it easier for you as a seller. So we basically just started working our way through that.

DAVID: At this enterprise companies, I’m guessing it was a corporate sell company. How many employees were, was in that company?

BEN: Actually it was a start up. We… I joined when there were 60 people.

CHRIS: I joined when there were 30, but when we left it was…

DANA: Yeah.

BEN: 200?

CHRIS: … 250 or more?

BEN: Yes. It was still a small company but…

DAVID: Right.

DANA: The Company’s name was Taulia and it’s enterprise because we built software for the largest companies in the world. So, Coca-Cola, like Home Depot, I don’t know.

CHRIS: Pfizer.

DANA: Pfizer. So we built software to handle their financial electronic invoicing. Payment. We handled like massive, massive data and they’re like really secure conditions so that set us up well to deal security with Amazon data.

DAVID: And was that like your guys’ first gig right out of college or just, you just went right into it?

DANA: Oh no.

CHRIS: No. I actually started working for a software company in Asia first. I’m originally from Germany as you can probably tell from my accent. And I started in a start up in Taiwan, building software security products so as to automatically analyze source codes to figure if there are any security vulnerabilities in verifications, and then eventually moved to San Francisco and then joined the Taulia the enterprise finance company. And I worked in both of those for over five years. So, five years and…

DANA: Each. Yeah.

CHRIS: In each, yeah. So, that’s definitely not my first gig right after college.

DAVID: Oh, wow.

DANA: For me, I say that when I got in college so I went into finance. For about a year right out of college, then I just, I really wanted to get more into tech, so, actually I went traveling a bit and then I moved up to San Francisco and joined a couple of smaller start ups and then moved to Taulia and I was there for about three years.

BEN: Yeah. And then I was doing software or data analysis for a video game company. And…

DAVID: Sweet.

BEN: Yeah, I was pretty cool.

DANA: It was a race car.

BEN: Yes, it was a racing simulator video game so I really love race cars. That was for my background is that I used to built race cars and so then I got into data analysis and then it was kind of same skill set to do a financial data analysis just because there’s a lot of working with big data and Tolin was not really a good fit, so I worked there for three years.

DAVID: Were you in San Francisco before that too or…

BEN: Yeah. I was in the Bay Area for…

DAVID: So why did you guys moved to San Francisco? It seems kind of like a big jump from Germany to San Francisco?

CHRIS: Yeah, well, for me it was more like an organic live your own journey, so after—when I was in college, I did an internship in Taiwan actually for two months in the summer. It’s like a summer program. And I would, that was my first time in Asia, I mean I traveled a lot in like the US and Europe. But I was really fascinated with Chinese as a language specifically if you do computer science since you give it like language processing.

You have to deal with like how would you certainly process 6000 characters and alphabets in software, that was actually very fascinating and so I wanted to go back and after I finished college, I actually did a year of studying abroad where I learned Chinese in China and then join a startup company there because you know after you just spent a year learning a language why do you just go back and okay. It would have been a waste of time so I wanted to stick around a little bit. And then that company actually opened an office in San Francisco and sent me over there and that’s how I kind of like got sent here and then I met my wife and got stuck here now and so.

DANA: It’s not such a bad place.

CHRIS: It’s not a, it’s a great place to live. Yes. So I’m not, you know, its not a burden to carry. Yeah.

DAVID: So what insights did you guys have, from Taulia, did I pronounce that company right? Taulia?

BEN: Yeah.

CHRIS: Yeah.

DAVID: From Talia. And then what instances did you guys have to go into Amazon, it seems like its, they’re both data driven but they’re kind of different, you know.

BEN: Yeah. I mean I think, from my perspective there’s, the core of it is we want to find out how to make more money using the data. And the kind of, the skills that what you look for and the way you process the data, it’s pretty similar across a bunch of different applications. Hence, I mean, it was really useful because the skills I learned there, I’d just used to start automating our own PPC, and then we’re like, oh, hey, if we’re going to write some software automator on our own, we might as well just write-software automator for everybody’s

CHRIS: Yeah.

BEN: So, yeah I think there’re a lot of similarities.

DANA: Yeah. Like once you know the space building software is a transferable skill so like… You’re the data scientist. For me, I do of more of a product design and user experience. And key, those are skills that apply whether you’re working on an enterprise financial software, or Amazon seller software, because we are Amazon sellers as well. So it’s, I know how it’s like to be one and so I can, it’s a process of like thinking hard about what the user might want to do when they come to a page and how to make the page clear for them. So that’s actually transferrable.

CHRIS: Yeah.

DANA: The skill.

CHRIS: And then I mean, I’m a software engineer so I think the, maybe one of the takeaways there was the sheer size of the data volume, so if you’re processing hundreds of millions of invoices for large enterprises, then it’s also, it’s good to say now, for example, in Prestozon right now, we have like over 200 Million data points on PPC reports and supports. So that’s also a lot of data that we need to crunch and you need to like have some techniques to make sure that is hand working at a reasonable speed and security and support.

DANA: Yeah.

CHRIS: That’s basically what I took out there to make sure that everything is meeting, maybe even a little bit higher percentage range of security but it’s scalable and secured for some time.

DANA: But though, you know, there was this article in Bloomberg or something, where there, I don’t know what source it was. There was some third party Amazon software services that…

CHRIS: History.

DANA: Got hacked. The customers’ data was stolen.

DAVID: Yeah.

DANA: So.

DAVID: I actually…

DANA: We still think about that. Do you know who it was?

DAVID: No. But it’s like every time, you know a third party services, I’m always a little resistant because I know my sensitive data is going into them so you always have to know who’s behind each software platform before you just… You don’t know what type of security they have set up..

DANA: It’s true.

DAVID: Yeah.

DANA: I mean it’s easy to just grant access into your AWS account but I mean, Seller account, Amazon Seller Account. But it’s kind of risky. You know you have to…

DAVID: Yeah.

DANA: … look into it.

DAVID: For sure. And you know its, there’s a lot of sensitive data would, depends on what type of data you guys pull, and I think from, I was looking at your guys’ website, you guys pull the advertizing reports specifically.

CHRIS: Yeah.

DAVID: So.

DANA: Yeah.

DAVID: So, it is limited in that sense.

DANA: Yeah.

CHRIS: Yeah.

DAVID: So you guys have 200 Million data points. There’s probably more than that, I don’t know. But how do you manage, I mean, like I have trouble figuring out all the data that is coming into me and you guys have way more data. How you guys managing that data?

CHRIS: Right. I need to make sure that the data is entering the system and is available but then basically available for Ben so that he can optimize the algorithms and then figure out what actually is happening to the data and what we do with it.

BEN: You know, from my perspective it’s actually easier, given that Chris does a great job of making that data available. It’s the data that we actually get from the advertising API, is broken down at a lower level than you get from Seller Central. So in Seller Central you get the search end report which is a two month aggregate, where you get campaign performance report which gives you performance per campaign per day. But we get per campaign, per aggregate, per search term, per keyword. So we can tell you exactly.

DANA: Per day.

BEN: Yeah, per day, so, I can go in and say, I only want to look at this really specific date range for this specific search term and that’s really powerful. So it actually makes the job of optimizing your campaigns a lot easier.

DANA: You can make better decisions.

BEN: You can make better decisions.

DANA: More per se

BEN: Yeah.

DANA: But also from, I think a question I’ll threw back to me, because we present the data like you said, it can be hard to know what all the data, just for your campaign, what metrics do you look at? What timeframes you look at? What keywords are important? That’s kind of; one of our driving models to process on is like focus. To help people focus and make sense of all of the different metrics that are out there.

DAVID: Very cool.

DANA: Actually it’s what we look for you.

CHRIS: Yeah. So you don’t have to look at it in the end.

BEN: I’m sure the biggest pain point that we see is that people just don’t want to touch their ads.

CHRIS: Yeah.

BEN: The most people, the people who sell in Amazon are really guys selling on Amazon and sponsored projects are just an actual burden for them and so…

DANA: It takes a lot of time.

BEN: It does take a lot of time.

CHRIS: That’s basically why got to be here in the first place, right? Because we spent all of this time finding a product and working with a supplier and getting it right and dealing with the samples and inspections, blah, blah and it’s finally on Amazon. And then we suddenly realized we need to show this to people you know, like people are not looking forward to it, they’re looking forward in planning it so suddenly like at this perfect product that I’d think would sell well but how do I create it in front of people, right?

BEN: Right.

CHRIS: So that’s basically like this additional thing that you didn’t really expect or that might just be an [inaudible] and so that’s going to be a problem that we want to solve like you shouldn’t have to worry about this. Focus on your product, focus on customer service making sure that your customers are happy with the product and leave the nitty gritty data optimization of what search terms to use when and so and so forth to a machine because they can actually do it best.

DANA: Yeah.

CHRIS: That’s a lot of insight especially since we have to search terms and support like how do you analyze what do you advertise for? But basically, once you get the data back off like, you know what plays well, then, there…

DANA: It’s indeed the nitty gritty, as well of the computer.

CHRIS: Yeah.

DANA: We actually have a lot of PPC consultants using our software, because you kind of do often need a human. Maybe doing hard decisions, doing certain structuring of campaigns but the nitty gritty can be automated. So that’s why we have a lot of consultants that work with us.

CHRIS: Yeah. Or you can segregate it where you could basically say, I have some really high spent key words that basically drive from, I don’t know, like 80% of my sales, because it’s one key word, I want to really make sure that nobody messes with that, but then I have a good long tale of 20% which spread over, I don’t know, like a couple of thousand other key words and I don’t really want to deal with those. And for that I can just have an algorithm to make sure that I’m not spending too much money there and focus really just some things that are important which comes back to the focus that you’ve mentioned previously.

DANA: Yeah.

DAVID: What? Do you guys mind? How much are you guys spending per day on an Amazon PPC?

CHRIS: Do you mean time or money?

DANA: Do you mean personally for our products?

DAVID: Yeah. For your private labeler, your brand on Amazon.

DANA: Do you mean money or time?

DAVID: No. Money. Moneywise like, because it sounds like you’ve guys got your campaigns optimized in certain point and then you just scale up the budgets. Have you guys scaled it up really high?

CHRIS: We’re not.

DANA: We’re not. We’re not focusing on our own physical products. We are focusing on software. We have . . . .

CHRIS: Two and a half, yeah.

DANA: Account with variation of them. But they are not like our main focus, but we use them to make sure we understand the software statement to make us some money. I mean it didn’t make us spare a lot of money but they’re not like, we’re not really driving forward to make those go…

DAVID: Almost some say

DANA: Where focusing on software.

BEN: Yeah. And once we run experiments on our own products…

CHRIS: Yeah.

BEN: Just like figure out how things, how the PPC works and so…

DANA: We don’t want to run experiments like five times a week.

BEN: Right.

CHRIS: Yeah. So, that’s actually what I was thinking I was saying, we Amazon sellers are selling ourselves and we sit here making money out of it but to be honest, I kind of see it more like a testing grounds so, when we roll up in the near future when we check our own data, we know these products and we know like if we, for whatever reason something would go wrong and we missed like a day or two then that’s okay, you know we’re not like…

DANA: One thing important to mention here, we are also PPC consultants. We have like a number of clients that we use our own automation algorithms to operate their campaign so…

CHRIS: For, yeah.

DANA: We spend a lot of money with them, less with our own products.

BEN: Yeah.

DAVID: How automated have you guys gotten in your PPC software to become like, when you say automated, is it like you just turn it on and it starts changing values instead of…

DANA: Yeah.

DAVID: Is that how you use it?

DANA: I have these products set up in auto campaign… like it walks through the steps. So, it was not a campaign, it will automatically harvest good key words, put them in a manual, phrase match you know, yeah, it’s pretty much… and it’s not in the end for software, I should clarify it. Internally it’s in the end we’re building the software that give that to other people. Make that available.

CHRIS: Yes. So the version that we have online right now that you can basically send out for is lacking a couple of steps behind of our internal tools, but it’s kind of like we’re having our internal test beds so to speak and once that has mature we can push that into the public available version. But internally we’re at the point where you basically flip the switch and automatically does all of that for you but yeah they are still… At some point you need to as I’ve said we want to focus on focus, to make sure that you know you don’t have too many distractions that are going on. But in every step in automation there are some decisions that you have to make.

DAVID: Yeah.

CHRIS: So we are trying to figure out like how do we trim those down to the minimum to not like the empty use of like 50,000 options that they can choose from to configure that automation and at that point they like, I don’t want to deal with that.

DAVID: Yeah.

CHRIS: Like even if it would run automatically afterwards like need me to only push one button and so that’s actually very iterative process to get to the point where you can say, okay, give me your account, tell me your target, push a button and you’re done. That’s kind of like what we’re honing in right now.

DAVID: What like…I guess one of the concerns I would have is, what if someone was selling the same pencil as I was. Would it configure it similarly to my competitors sponsored campaigns?

BEN: Yes. Yeah. We’re very careful about that. We don’t actually use any…like we don’t look at the key words.

DAVID: I see.

BEN: The automation doesn’t really care about the keywords, I should say. So we’re not using your competitors’ data, against your data against yourself. It just focuses on your listing, your product, to make sure that those keywords are performing for you, reading your targets and I mean, that’s pretty much at work. We’re planning on doing some benchmarking like saying in this kind of, in this category these are the kind of the values like on call market, we’re seeing CPC’s, Rise, kind of stuff like that but nothing like, okay, you’re bidding on blue pencil and this guy is bidding on blue pencil. He just increased his [inaudible] page and…

DAVID: Yeah.

BEN: No, no, no.

CHRIS: And this is weird. We said in the beginning there’s something’s you can automate and you should automate.

DAVID: Yeah.

CHRIS: But other things you need consultant or humans.

DANA: Yeah.

CHRIS: We’re not looking, yeah, there’s no sense in trying to look at your listing and automatically try to determine, oh, you’re missing this one keyword, right? There’s a lot of empathy, and knowledge, and gut feeling…

DANA: Yeah.

BEN: Yeah.

CHRIS: And other things that got into this.

DANA: And some people wouldn’t want to automate yet.

CHRIS: Yeah.

DANA: Some people like right now, Prestozon, you go in and we give you bid suggestions for all your keywords. The most important one’s are on top. So once you spend the most time that’s what we think are important because where you spend the most you have the most impact on your ACoS. But yeah, we give you like a bid suggestion and then you just click that button, take that discussion or you can edit it yourself and so I think that gives you a fair amount of control if you want that.

DAVID: Let’s say if you wanted to do a lot of manual stuff, how would you, like what are the strategies to bring our ACoS’ down.

BEN: Yeah. I mean, I think negative key words are pretty good one. I would say I prefer harvesting all of the possibly profitable key words first and making sure those are all managed independently and then managing the bids for each one those. So, once you have a bunch of key words, you can manage the bid down to the point where it’s meeting your ACoS target. And at some point generally there’s a switch tip flips and you’ll go below a bid and it won’t get many impressions and that’s when you know why I hit the limit, I tried to make this bid as low as possible to bring it into my target and it just doesn’t work like I can’t make it that profitable. That’s really, that really depends on two things, like the market to that key word. Key word markets are always changing, and so cost per click is changing, and like the number of competitors, so the number of impressions you get. Sometimes they’re seasonality. So key words are hotter at different points of the year. But then also the price of your product I mean it’s really easy to hit 2% ACoS for a product that cost $200. But if you’re selling a $15 item in a really competitive space then you might just like, your ACos just might be high.

DAVID: Yeah.

BEN: And so managing that big down to the point where that threshold is, where you’re just not getting impressions, you know that you’ve maxed out your potential there.

DANA: Well, like it’s… I would just like to clarify. When you say it managed the bid independently, you mean moved them from out of a campaign into a manual [inaudible].

BEN: Right. Yes. You want to harvest as many search terms as possible. So I set up everything in auto campaign, a bunch of like broad key words and then, I’m going in there I’m looking for any search terms that get clicks and then putting those in as their own key words and then managing the bid independently on each one of those key words. So there’s…

DANA: Managing mean like one manual campaign all together or separate manual campaigns?

BEN: Yeah. I mean, you want to split it up as much as you can. Amazon… one of the things that I don’t like about sponsored products is that they can only manage the budget at the campaign level. And so if you find, like sometimes certain skews do much better than other ones even though like variations on the same product like red might sell a lot better than pink. And you can’t really predict that so you put them all in different campaigns and then you can manage the budget for each one of those or that’s actually probably a good tip for managing ACoS.

Like some skews just don’t perform on that, but Amazon will still get them impressions, will still get clicks, and so if you just find out which key words those are and don’t advertise those thing you can increase even decrease your ACoS for the month you do sell.

DANA: That’s an idiot keyword, when you say don’t advertise it, that means make it into a negative keyword.

BEN: Well just make sure that’s a keyword is not an @.

CHRIS: Actually you take it fully out.

BEN: It takes that out.

DANA: Out. Yeah.

CHRIS: Yeah.

BEN: Yeah.

DANA: Yeah. But it could also mean that a huge way to bring your ACoS down is to make sure you’re using negative keyword.

BEN: Yeah.

DANA: Some people would put negative keywords for a few top obvious ones. But if you really as tediously go through and find the keywords that are getting clicks and so you’re paying for them but they’re not making any sales. And this is where also being a human comes in. Like, okay, I sell plastic water herb, mineral water bottle and this is a totally unrelated keyword that’s also not getting any sales. Make that into another keyword. Even if you’re only spending $2-$5 a day, that adds up. So if you are kind of religious about doing that every couple of days or maybe every week, you can really, really, really bring down your ACoS down pretty far because in the end of the day your ACoS is just the amount you spend on ads divided by the amount you get from your sales. So if you can reduce and like shave, continually shave off the top of that numerator.

BEN: Yeah.

DANA: You can really bring your ACoS down.

DAVID: I love how you guys like going back and forth trying to figure out, no this is how you bring your ACoS down.

DANA: There’s so many steps here.

BEN: I can’t…

CHRIS: Yeah.

DANA: How we’re overwhelming people but that’s probably… Everything are all for them.

DAVID: It’s good.

DANA: So you got the most benefits on.

CHRIS: Yeah.

BEN: I mean another good thing to, another point to make is that you have to wait the right amount of time. I see a lot of people, especially in some place per groups you will see people who were like, okay, I’ve been running my ads for a week and the ACoS is at 60%, and I’m really sad. How do I get this down. I’m thinking like these ads are just not going to work for this time. No, no, no. Wait. We can make this profitable. You just have to give us some time. So these things, week after week, if you just keep going back, and if you’re consistent, then after a few months something that started off really bad can come out and be a really profitable campaign.

DANA: Consistent in making changes.

BEN: Yeah. That’s right! So like keep making your…

CHRIS: Make changes, yeah.

BEN: Yeah. Keep making your negative keywords. And…

CHRIS: And also just give Amazon time because there’s definitely something like ramp ups.

BEN: Oh, yeah.

CHRIS: So if you just put something out there, you actually see like graphs that over time, it seems like Amazon is giving it more and more exposure, and like exact same keywords that just like a couple of tricks and just a couple of impressions. Like in the beginning of the week looks much better at the end of the week. And there are a lot of other factors like for business or it could be just more people are out shopping on Friday than those on a Monday, but of all if you’d record it like an aggregate, it’s definitely clear that there’s a ramp up time also…

BEN: Yeah.

CHRIS: With how Amazon treats…

DANA: Yeah.

CHRIS: Treats your ads.

DANA: Per impressions and also per click you rate.

CHRIS: Yeah.

DANA: The people that Amazon shows your ads to improve, as Amazon learns.

BEN: Yeah.

CHRIS: Because Amazon also wants you to sell. It’s not like you’re playing against the dealer here, right? They have vested interest to show your ads in the most profitable way because they also get a cut when you make a sale.

DANA: They cut.

CHRIS: So they also try to learn and see how they can optimize the whole thing.

DAVID: I find it crazy that like in the first place that we have to pay to show our ads on their website. It’s such a weird concept and you’d never imagine it until it starts making you a lot of money. That’s why we do it.

BEN: Right.

CHRIS: Yeah.

DAVID: It’s just.

DANA: What was it? What was the number, like the amount sent on Amazon, as we see?

BEN: Ah, say yes. Billion dollars or something.

DANA: It’s like, and it’s doubling every year.

BEN: Yeah.

DANA: It’s insane.

BEN: Yeah.

DANA: Like Amazon is just cleaning up.

BEN: Yeah.

DANA: And we’re all just trying to get a tiny piece of the…

CHRIS: Piece of the cake.

DAVID: Yeah they are mentioning something about pillars of Amazon’s business and PPC like becoming one of the main pillars of their business.

BEN: It is. Yeah.

DANA: Yeah.

BEN: Especially since everybody should be as unaware last year. Yeah, that was…

CHRIS: That was a big impact.

BEN: The PPC’s a lot more, I mean we’ve seen double the interest in PPC since then. People are just, say okay, well I need to push my product and…

DANA: It can’t launch product, though.

BEN: Yeah, it’s pretty difficult.

DANA: Unless you already have a huge established following from somewhere else.

BEN: Yeah.

CHRIS: Some other traffic drivers that…

DANA: Which I think will do.

BEN: We had a pretty good success of that, last year we launched a product in the beginning of December and I think that was after in celebration for…

DANA: Yeah.

CHRIS: Uh-huh.

BEN: These slots.

BEN: So it was into a fairly competitive market in the middle of the hot season I mean like it was December 10th or something.

DANA: Yeah, I love December.

CHRIS: I know.

BEN: Or something like that. And we just went with in with a super aggressive PPC strategy and we ranked on page 2.

DAVID: Yeah.

BEN: For the keyword that we won, the ranked one.

DANA: Like a week later.

BEN: Like a week later.

DANA: Yeah.

BEN: We had like, we sold, I don’t know $50,000 of that item.

DANA: This is also a summer product, too.

BEN: This is also a summer product. Yes, it was.

CHRIS: It was unexpected. Unexpected success. We didn’t expect it to be easy at all.

DANA: But we hoped that that strategy would work

CHRIS: Yeah.

BEN: Yeah, and it was really good to see that it did.

DANA: Hot tip.

BEN: Yeah.

CHRIS: Yeah.

DAVID: When, so let’s for that hot product, let’s say it run out of stock. Do you guys keep your PPC campaigns on to keep Amazon just to alert that you’re going to bring it back and stock her or is it good to turn them off?

BEN: Well, I mean it won’t run anything if you don’t have the byproducts.

DAVID: Yes.

DANA: I’m not sure if it matters. We leave them on just because we’re lazy, but nothing gets shown, you don’t spend any money.

CHRIS: Yeah. If you are at a store and Amazon is just not showing you ads so you are not really, you know.

DANA: I’ve heard different things like going out of stocks and whether it hurts you. We just had a huge headache were…

CHRIS: Oh, yeah.

DANA: Oh, my gosh. We saw this home, it’s a kitchen good and Amazon, we think Amazon was recycling. There was like a few broken ones. We think Amazon keeps sending broken ones out to customers, and so we were like, I don’t, this practice does not create things we are getting tons of broken returns and…

DAVID: Wow.

DANA: We didn’t know how to fix it, but Amazon basically shot that listing down. We had to take all of our inventory back out, send it to a warehouse, we had to check every single one of them. We ended up being like 9 broken one’s or something, and send them all back to Amazon. It was a huge headache but I guess my point is we didn’t, we did lose some sale volume, but we’re picking back up quickly.

BEN: Yeah.

CHRIS: Yeah.

BEN: I mean, Amazon remembers that people did like your product and then as soon as it back in stock, I’ve heard of people bouncing back to like their exact same organic ranking for a bunch of keywords within like a week.

DANA: Yeah.

DAVID: Yeah. I’ve actually have… you say hate running out of stock now I like, I don’t mind it because I used to over order based on running out.

BEN: Right.

DAVID: Before it just hold a lot of cash flow.

BEN: Yeah.

DANA: Yeah.

DAVID: Do you mind if we go back just one step and…

CHRIS: Sure.

DAVID: You mentioned you sent your inventory to a warehouse, right?

CHRIS: Yeah.

DANA: Yes.

DAVID: I actually had an issue and I sent it back to my house, probably one of the worst decisions I’ve made.

BEN: No.

DAVID: There’s too much stuff.

CHRIS: We did that too.

BEN: We did that too.

DANA: Oh my god!

BEN: I have a bunch of inventory sitting in my bedroom right now because it’s like always remove orders. Some of them are still okay products and it’s such a headache. Now we use a Reverse Source Logistics.

DAVID: Cool.

DANA: Right.

BEN: And now, I think they’re really good.

DANA: Yeah.

CHRIS: Yeah.

DANA: They do everything, prices are reasonable, they create responses.

BEN: Right.

DAVID: What the…

BEN: Super fast.

CHRIS: Yeah, we definitely went to a lot of learning along the way so that’s something where we feel like we actually giving back to the community is an interesting… crazy, but eventually we went through a lot of steps that sellers went through and we had a lot of headache and we did a lot of hard lessons that we learned and so.

DANA: One hard lesson, yeah, and to pay that forward, is be happy with your sample.

CHRIS: Yeah. Absolutely. That was our first mistake.

BEN: Right.

CHRIS: We were trying to figure out our first product and had a couple of samples send back and we liked it. There was like, it seems a little bit greasy.

BEN: Yes.

CHRIS: It was a good product and it seems like a little bit greasy but other than that it was fine. And we assumed oh, it’s probably just going to dry off in a couple of weeks, right? So it was not a problem. But…

BEN: And we were trying to rush this product through before Chinese New Year.

CHRIS: Yes.

DANA: Yeah.

BEN: Which is our main driver, and so he assured us that, yes, it’s fixed. We had to rush out because you guys are in a rush.

DANA: It won’t be greasy.

BEN: Yeah. It won’t be oily and then we get a thousand units of this thing and they’re all oily.

CHRIS: Basically, the oil seeps out of the packaging basically, right?

BEN: Oh, my God.

DANA: Oh, my God.

CHRIS: So…

DAVID: What?

CHRIS: We can’t sell these.

DANA: We did sell them. We had to go through this whole like mini fabric process.

BEN: We sell them in a refurbished kind of way.

CHRIS: Yeah. We, we… Yeah.

DANA: Anyway.

BEN: Oh, men.

CHRIS: Every single one of them.

DANA: Yeah. So the moral of the story, be happy with the sample even it delays you. It’s worth it.

CHRIS: Yeah.

DANA: Yeah.

DAVID: I see…

BEN: The one you target and projected.

DAVID: You don’t rush it out.

DANA: Sorry?

DAVID: At least you guys were able to fill your car up with gas.

BEN: Yeah.

CHRIS: Yeah.

DANA: Yeah. Right.

DAVID: Wait, all right, so…

DANA: Just about.

DAVID: So, when you guys sent the stuff back, you sent it to this warehouse and they took care of taking it out of all the boxes. They got it.

CHRIS: Yeah.

BEN: Yeah.

DAVID: They cartonized it or packaged them all up?

BEN: [inaudible] or something.

DANA: Yeah.

BEN: Yeah. So…

DANA: Yeah. To go out, we asked them, like hey, can you make sure nothing’s broken. You have the two pieces that’s broken. And they have sufficient bubble wrap and plastic wrappings and the boxes aren’t smashed. Any of them that don’t meet these criteria, please dispose of them. They dispose of them for free. And the ones that were good, which was almost all of them, they just repackage, and sent back to Amazon for us. It was reasonable, in a few hundreds of dollars for all that, so it’s pretty reasonable.

CHRIS: Yeah.

DAVID: For those tuning in, it’s not, it doesn’t sound like it’s a big deal when you have to recall inventory. But at some point you’re going to have to recall maybe, a hundred units or a thousand or ten thousand units and it turns out…

DANA: Yeah.

DAVID: To be a lot of work. When it shows up…

BEN: Yeah.

DAVID: At your doorstep.

BEN: Yeah. I think you have to, I mean, you have to look at it from the plans or perspective, which is…

CHRIS: Yeah.

BEN: My time is worth money. If this is going to take me a week of work to get through these five hundred units, is that the best way to spend my time? And it was pretty clear to us that it wasn’t, so we, plus it’s just so much stress, I mean…

CHRIS: Yeah.

BEN: You know…

DAVID: So much stress.

BEN: If you don’t, you’re not set up to receiving five hundred units.

DANA: What are you going to do with the pallet?

BEN: Right.

CHRIS: Yeah. That was one of the things that we’re actually, we we’re so like, the kitchen item nightmare, like Amazon also messed up in a way. Where they actually send it to the wrong address and suddenly we get these calls, well, there’s supposed to be this pallet that’s going to be dropped off your place.

BEN: I know.

CHRIS: What are we suppose to do with the pallets?

BEN: I’m on the 34th and I don’t have this… an elevator in here.

CHRIS: Yeah.

BEN: I can’t do this.

CHRIS: Yeah. And in some situation if you have lots of items or your items are rather bulky, there is no way you can have it shipped to your house. Or, unless your neighbors are very relaxed with you propping up with a crate of pallets of whatever, but…

DANA: But even if you do…

CHRIS: Yeah.

BEN: Yeah, just don’t do it. Just find a third party to take care of it.

DANA: The myth of branding, like time is money. And there you spend three days going through this. You can make so much more money finding the next product, or…

CHRIS: Yeah.

DANA: Working on your PPC, or whatever.

BEN: Yeah.

DAVID: The funny thing is even though we say this, everyone goes to the lazy ones that, ah, I can do it.

BEN: It do.

CHRIS: Yeah.

DANA: You’re right. We did it anyway. Twice.

BEN: Yeah.

CHRIS: Because it is maybe just like this psychological barrier were like I’m going to pay somebody money to open boxes, I can do that myself, right?

DANA: Right.

BEN: Yeah.

CHRIS: Until you see the boxes sitting in your living room and you’re like.

DANA: Ahh.

CHRIS: That was a very bad idea.

DAVID: Well, the other issue is when they do send you the inventory it’s like two units in a big box.

DANA: Yeah.

BEN: Yeah.

DAVID: So then you’ll multiply the boxes by a hundred. Even if it’s two hundred units…

CHRIS: Yeah.

DAVID: It turns out to be a lot.

BEN: Yeah.

DANA: Yeah. It’s kind of we call the different distributions centers, yeah.

BEN: There was another thing about this, the whole fiasco is that, I think all of the broken ones were from one…

CHRIS: Yeah.

BEN: Performance center.

DANA: Yeah.

BEN: So it’s just like, I don’t know, it’s a good…

DAVID: Was it…

BEN: To keep track of… what?

DAVID: Oh, what?

BEN: It was a good idea to keep track of your… like what’s happening with each… We can actually find, we actually found in the reports that people have returned broken items and then Amazon had returned it to the fulfillment inventory. So Amazon is putting these back into bins that were getting send off to our customers which is… and there’s no button you can check that says, yeah, if somebody returns it, no matter what, even if it’s good…

CHRIS: Just discard it. Yeah.

BEN: Just discard it, or send it back to me. They put it back and so. Usually they put it back in unfulfilable and you can get those returned to you.

DAVID: Yeah.

DANA: But there’s so much on it.

BEN: But sometimes they put it in fulfilable and so I think that was what’s happening with us was, these same units were getting send out and then returned by a customer and put back in fulfilable and then send out again.

CHRIS: Send out again.

BEN: And yeah.

CHRIS: Surprise, surprise! The second guy also didn’t like it broken.

BEN: Yeah.

CHRIS: Item, so he send it back as well.

DANA: But you can tell it’s kind of a hassle, but if you know which distribution center tend to break things, you can actually send your goods to a specific distribution center. I think you have to, what is that called you to pay a certain…

CHRIS: It’s more expensive. Yeah.

DANA: Extra fee per unit, but…

DAVID: Yeah.

DANA: It would be worth it.

BEN: It would keep your listing from going down.

DANA: You kind of problem. Yeah.

DAVID: Do you guys know which warehouse breaks all the units because I have the same issues as well? Turner? I don’t remember the specific.

DANA: Yeah.

DAVID: I know Texas is pretty good.

DANA: So Texas is good, you said?

DAVID: Yeah.

DANA: It wasn’t. I want to say maybe Kentucky?

DAVID: That might be right.

BEN: Yeah. I don’t want to like.

DANA: Yeah.

CHRIS: Yes, yes. It’s too, like… We actually really remember from this issue when you look on line there were several people complaining…

DANA: Yeah.

CHRIS: … about that. But we don’t want to contribute to.

DANA: Yeah.

BEN: Yeah.

CHRIS: That.

DANA: Yeah. That’s for sure.

BEN: We just keep an eye on it.

CHRIS: Yeah.

BEN: You go into reports and fulfillment reports and get all this.

DAVID: Yeah.

BEN: There’s so many to go through and it’s good to keep an eye on it.

DAVID: So what are the strategies to bring down our ACoS? I know you guys are holding back secrets.

DANA: Yeah sure. We could go more about our secrets.

BEN: Oh men, I, yeah.

DANA: One thing we actually recently just announce is, when I say we I mean Ben. Ben has an analysis on click through rate, whether you should use that metric or not, I think a lot of people out there recommend using click through rate, maybe you should say what you’re trying to do..

BEN: Yeah. There’s not really a relationship at all between click through rate and ACoS. And so it’s tempting to give up on a keyword if it has a really well click through rate. But I would say it’s pretty important to wait until you have enough clicks to get a sale. If your stay here on an average thing like a 5% or 10% convergent rate per orders per click. You should wait until 20 clicks before you decided it’s a bad keyword. You can also change that threshold based on your CPC and the price of your item because obviously you don’t want to wait for 20 clicks if its a 2 dollar CPC and you’re selling a $10 item. But we see a ton of really profitable keywords even like 21% CTR which is interesting because you can see the graphs in our website and…

DANA: Our blog.

BEN: Yeah, our blog. And it’s wild because it’s like this shotgun and there’s a whole bunch of keywords that are centered around this 0.3% click through rate, 30% ACoS and then everything else they just all… There are tons all around.

CHRIS: Like a big cloud that surrounds the area.

DANA: Let’s just to clarify that there is no relationship between ACoS and CTR. It’s just yeah, a big cloud.

BEN: Yeah. So I would say, don’t give up too early on keywords because…

DANA: If they are low click through.

BEN: If they are… don’t like, it’s tempting to get rid of them, but, you know.

CHRIS: Wait, there might have be a direct strategy to reduce your ACoS, but it might be like a red herring that you, don’t try to optimize prematurely.

BEN: Yeah.

CHRIS: Don’t try to cut off potentially profitable something.

BEN: Because the other probably not causes increase ACoS but also increase in sale.

CHRIS: Yeah.

BEN: And if you gave up on keywords too soon, then you might lose out on some sales.

DAVID: Do you guys think, have you guys messed around with the enhanced product listing versus a regular product listing in which if it converts better in terms of ACoS. When you’re launching this PPC campaigns?

BEN: I…

CHRIS: Well, the thing with product listings is that at that point, so if you’re very datagram, right? And the product listings, there’s a lot of…

DAVID: Variables.

BEN: Yeah. There are a lot of variables where it comes to like what pictures are you using? What wording are you using? And a lot of that is also very subjective, so that’s not, like at least, we haven’t really focus on that yet in terms of optimizing your individual listing and the text in your listing because there’s also not a lot of data that you get back from Amazon to actually judge that, right?

DAVID: Yeah.

CHRIS: You came into Seller Central and see sessions or how many people look at stuff but it’s not fine grade enough for you to actually one successful experiment so it was like statistics speaking.

DANA: Yeah.

CHRIS: It’s going to be little bit more washy.

DANA: But.

CHRIS: Not really…

DANA: Then we totally have heard that when you upgrade to an enhanced listing, you have better conversion. But that’s not something we directly experimented yet.

CHRIS: Yeah.

DAVID: Yeah, I have been, sorry. I have two enhanced listings and then the rest. The reason why it takes awhile to not only submit an enhanced listing but to get approved as well, they’ve been increasing it. But, I haven’t found I haven’t found that… It actually increases my ACoS that much or at all, you know.

DANA: Increasing it or improve it?

David Aladdin: Yeah, it doesn’t decrease. My bad.

DANA: Yeah.

DAVID: The average cost of conversion.

BEN: Interesting.

DANA: That is interesting. Maybe it depends on the product.

DAVID: Yeah. So, I guess it’s just something I got to keep messing around with.

DANA: Yeah, that’s the thing.

BEN: I mean, I think… Yeah. In general, every product is unique and every market is unique and so keeps experimenting. I mean, I think everybody should be, always be testing. Test new keywords, test different bids, test different listing text. Go through your keywords and see what’s working or what’s not and then make sure that those are any of listing in your back end keywords.

DANA: That’s a really important point.

CHRIS: Yeah.

DANA: Yeah.

BEN: Yeah.

CHRIS: But like in a nugget, never be static. So, even if you find like you honed everything to really not, you know like your ACoS, something nice so much, I mean in sense you’re doing… Keep going back and checking because there might be new suggestions that are popping up because it could be your competitors or timing is everything. Like if you launch on right season or suddenly, you know a new season comes along and there’s some new interest or some TV star just mentions, continue meme that has nothing to do with your product but initially…

BEN: Yeah.

CHRIS: But then suddenly.

BEN: Yeah.

CHRIS: People connected with it. So there’s a lot of things that always influx that are worth keeping an eye on.

BEN: Yeah, and I think that it touched on important point is that, you know Amazon is changing extremely quickly and you know FBA is only been around for a decade or so it is… And the last five years it just been the whirlwind. So to think that you could like set up a listing or set up a campaign and just let it run, you know you’re probably going to lose out on some sales. So, always come back. Even if it’s not daily, if it’s weekly or if it’s monthly, come back, check on things, see what you can improve. If you’re keeping, if you keep on improving, improving, improving and your competitors aren’t, you’re going to get ahead of them.

DAVID: That’s good advice. Let’s just end at that. We’ve got about 10 minutes left. Let us talk about you guys, like how do you guys start your morning day? What’s your routine look like?

DANA: Yeah.

BEN: I think you probably… You have definitely…

CHRIS: I have this… So as a software engineer I’m somewhere on the spectrum of OCD. I have a rather strictly planned all day usually that I try follow with it. If I don’t get follow it, I got like very nervous or less happy. I usually get up in the morning, too early according to my wife, because she gets… yeah, probably wake her up and go running on the lake. So there’s like a lake around here.

DAVID: Nice.

CHRIS: That I just do morning run, go to the gym, come back then eat breakfast then able to stand up and then it’s basically just working through the day with like predefined lunch break and then whatever the evening holds.

BEN: Yeah. I think that… Actually I want to expound on that point a little bit. The most important thing that we’ve done as a team.

DANA: Yeah.

BEN: Yeah.

DANA: I was just going to define stand up.

BEN: Okay.

CHRIS: Oh. Sorry. Yeah, I just mention that, but yeah.

BEN: Yeah. So stand up is just like ideally you would be standing up and there will be a really short meeting just like tell, talk about where you’re at and where are your blockers are so that we can keep…

DANA: With the team.

BEN: Before with the whole team. And ours usually end up being like half an hour or an hour because we talk about all, you know all the business.

CHRIS: But it is like the one meeting we have besides…

BEN: That’s super important. Dana and I spend a lot of time travelling last year and we were in Italy for awhile and we are in Asia for awhile and that time zone difference? Really hard to have any face to face time and our team dynamic wasn’t very good because everybody was held up by everybody else and it was just…

DANA: Face to face communication was magical.

BEN: Yeah, it is magical.

DANA: And it only works when the team who does listening. You probably already know this but it’s just really helpful to have FaceTime, in person is the best, but it’s not that just Skype or something.

CHRIS: Yeah, it’s just the Skype even… it’s much better than phone call even you call each other…

DAVID: So true.

CHRIS: On a phone without seeing each other, it’s less quality then.

DANA: Like there’s so much communication that is none verbal.

BEN: So yeah we use Slack all the time which is just like an instant messaging servicing.

DAVID: Yeah.

BEN: When you’re just basically texting each other all day, even if you thrown a bunch of Emojis like you know sarcasms gets missed or peoples’ true emotions gets mixed and so things can escalate where is you just jump on a call and it’s like “Oh okay, well I don’t actually hate you, you don’t actually hate me”.

CHRIS: Yeah.

DANA: Yeah.

BEN: We can work this out. That’s probably the most important part of our whole day.

CHRIS: Yeah.

BEN: Is that we all jump on this call at 11 AM and then we talk about what’s going on with the business and what each person needs.

DANA: Yeah. But in terms of other morning routines, neither of us, I think is regimented or like.

BEN: Yeah.

DANA: I don’t know.

BEN: Yeah.

CHRIS: An SOCD?

DANA: Well, no, it’s like I wish I was. So, have that sort of have it but I’ll usually get up and do some yoga and stretching, just kind of like get awake and then drink lots of water. This is something I started doing a few years ago and made huge difference to save me a time when you get up, you really dehydrated when you wake up.

CHRIS: Yeah.

DANA: And you did breathing all night and you lose a lot of water surprisingly. So it is really simple, it’s a simple thing but drinking like probably 2 full cups of water, 2 full glasses is really helps clear your head of that kind of like morning…

CHRIS: Grogginess or…

DANA: This is from a great author that I love. He calls it frozen lettuce in the morning.

BEN: Uh-huh.

DANA: Where your brain is like frozen lettuce and you’re kind of like it’s all sort of sticky and foggy and I just love that metaphor. But anyway, then I like to meditate usually. Sometimes I feel like I don’t have time which is totally just a terrible excuse but yeah, meditating for me even just like focusing on my breath for like 5 minutes or 10 minutes helps like it calms your limbic system down and you can just do much better, I can be much better for more focused work throughout the rest of the day if I just start the day like that so.

DAVID: It sounded like Tim Ferriss for a second. He’s just like pulls out these big words out of nowhere. “It calms your limbic system.”

DANA: Yeah. Tim Ferriss. I said about… Well so.

DAVID: And before we cut out, can you guys recreate that time when you guys all decided to create Prestozon and FBA business. How did that look like? Were you guys just like… How did that look like?

BEN: Well. So.

DANA: We…

BEN: I was like I want to… like I want to start something that like basically I just want to buy my free time back so that I could be more flexible folks and other stuff and we worked on that together.

DANA: Yeah. Well… that’s why we started the Amazon products.

CHRIS: Right. So that’s when we start the Amazon products and yeah, so that was…

DANA: And then we notice that PPC was just really terrible and if we’re not really in a good school about them. So Christian is our friend from work, I called him and we were like, “Hey Chris, want to come join our company and build this?”

CHRIS: Yeah, I was in some may say, I seem to be in the cycle of about 5 years, so 5 years in my first company and then 5 years in this one and it was like, okay, I build what I kind of had set out that is all the infrastructure is in place, so what is the next thing? And then that sounded very enticing and so we like, why, yeah, sure. Let’s try this out. I don’t know anything about FBA yet but that can change and so… and we learned a lot along the way. I think that was very interesting. If I go back to that time, I think that was most interesting part of experiences.

BEN: Yeah.

CHRIS: There was a lot of like hard learning, things that you’ve never envisioned yourself to be like this. There’s thing where we actually went to a Sellers Fair in Hongkong, and we were like we are pushing Dana around in a wheel chair because she had just broken her foot just before we went on the trip.

DANA: Yeah.

DAVID: Oh geez, that’s the worst.

CHRIS: Which was unfortunately.

DANA: The worst.

CHRIS: Like in this giant exhibition hall in Hongkong and you know you have to figure out where do we get a wheelchair that was and then push her on. It was great because we were memorable. Like all the sellers remembered, “Oh yeah.”

DANA: Hi!

CHRIS: “You were like this blond woman in the wheelchair. Yeah, we remember you. Yeah. Come here”. It’s a…

DANA: Yeah, we made lots of friends.

CHRIS: Yeah.

DANA: Of course, I mean Chris speak fluent in Mandarin which always help when you’re in China.

CHRIS: Not fluent but yeah, it’s easier to communicate in person.

DANA: Yeah.

CHRIS: We actually went to see one of our sellers, that was important too like just make… they learning about that relationships are just must better again if you meet in person, if you just bring a present and I can talk.

DANA: Especially in China, like it’s just all about the relationship.

CHRIS: Yeah.

DANA: And they’re like really happy to host you. They took us after this like really nice lunch which is just like 10 courses and lots of beer.

DAVID: Wow.

DANA: I never really lost any meal.

CHRIS: Yeah.

BEN: But I think like through all of this our goal has been to reclaim some of our time. We love working for ourselves, you know making our own hours and our own… flexibility is good, I get a lot of my best work done from like midnight to 2 AM and so you know having that instead of like having to like force all of my work to happen 9 to 5 or you know whatever the standard is like.

DANA: Like we’re working way more hour than when we were around like normal “Job” but…

BEN: You can go on a bike ride even all of the day.

DANA: Right.

BEN: Yeah, and then you can work late at night and it just all works out.

DANA: Yeah, the flexibility is really nice.

DAVID: Guess, you don’t have the boss like asking, you know you guys are the boss. You’re not under anybody’s control in that regard, too.

DANA: Yeah.

CHRIS: Yeah, which is… there are two sides of that coin like on the one end side, yeah, you don’t have anybody telling you what to do but then you don’t have anybody telling you what to do and you need to figure that out to yourself.

BEN: Yeah.

CHRIS: So, in areas where you’re secured, that’s great, like we all have like our area of specialties where nobody will tell us how things work and we just do that. But then for example, none of us is really great in marketing and so that’s something where you’re spending there “Well, okay. So, similar to our A products” like we need to put Prestozon front of people and like “How do you do that?” you know.

DANA: I was wonder one of our biggest like surprises or challenges with Prestozon is actually we kind of thought that if we built this off of software, people would come and like it and in fact it’s actually just hard to get in front of balls nowadays, you know just so many services really aggressively marketing as well.

CHRIS: Yeah.

DANA: And so not like Chris that none of us from our career is… that’s been a learning.

CHRIS: And there is also like you have this hesitation like everybody hates marketing image, right, like when you open your inbox in the morning and there like 15 more “Oh he signed up for this” and blah, blah, blah, and then he’s like “I don’t want to be the person that sent this out” but then again he’s like “Well” but if you don’t, how would anybody know about it.

DAVID: Don’t be that dude.

CHRIS: It is like 5 in out. Yeah.

DAVID: That is funny.

CHRIS: Yeah

DAVID: Alright. So, how can get people reach out you, how do they contact you?

DANA: Well, Prestozon.com is our website. You can also email us at team@prestozon.com. You can also find us on Twitter and Facebook, Prestozon is presto like magic, P-R-E-S-T-O and Z-O-N like Amazon Z-O-N, that’s where the name comes from. We want to make your…

CHRIS: Amazon experience magical.

DANA: Yeah, so that is probably the best places to reach us.

BEN: Yeah and like Team Prestozon goes directly to the three of us, we all see that so.

DANA: Yeah. And if there is anyone in San Francisco, we love meeting…

BEN: Oh, yeah. That’s something.

DANA: All our users. We’ve have meet a couple of them and we’d love to meet more.

]]>Forget excel sheets! Ben, Chris, and Dana are Amazon sellers from San Francisco who got frustrated managing PPC by hand and set out to automate the whole process with Prestozon. The founders met at our last company which was a supply chain finance and ...

What you'll learn:

* How Prestozon was founded
* Why they started Prestozon
* How to optimize your Amazon PPC
* How to decrease Amazon ACOS
* How to increase ad spend and profits
* How to tweak product advertising settings
* Techniques to improve your Amazon advertisements
* Negative keywords and how they affect Amazon ppc

DAVID: Can you guys take us in the beginning before Amazon, where did each of your journeys start?

BEN: We actually all met at the same company building Enterprise Finance Software and we wanted to do another kind of smaller thing and we all decided to get into Amazon FBA.

DANA: Yeah, we’ve all worked in software for most of our careers. All that you…

CHRIS: Yeah.

DANA: And we started in Amazon and then we then realized that Amazon software space is… there’s a lot of tools that weren’t available yet, so were like, all right, sound great. Like, we need these tools as sellers and we love building software so it’s kind of natural fit.

CHRIS: Actually, we started from a different perspective first, so in FBA. We actually have this idea, like we want to start it automating from the scratch, so we actually built a market analyzer to figure out like if we start like what would be the best products to go with and that was kind of like our first attempt. But then, pretty soon, after we’ve figured out that there are a lot of other steps in between too that have gaps in how the tools work right now over this availability to make it easier for you as a seller. So we basically just started working our way through that.

DAVID: At this enterprise companies, I'm guessing it was a corporate sell company. How many employees were, was in that company?

BEN: Actually it was a start up. We… I joined when there were 60 people.

CHRIS: I joined when there were 30, but when we left it was…

DANA: Yeah.

BEN: 200?

CHRIS: ... 250 or more?

BEN: Yes. It was still a small company but…

DAVID: Right.

DANA: The Company’s name was Taulia and it’s enterprise because we built software for the largest companies in the world. So, Coca-Cola, like Home Depot, I don’t know.

CHRIS: Pfizer.

DANA: Pfizer. So we built software to handle their financial electronic invoicing. Payment.]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean53:59AS 84: This Former IBM Employee Now Pulls 8 Figures Annually In E-Commerce – Bernie Thompson CEO of Plugablehttps://amzsecrets.com/84-former-ibm-employee-now-pulls-8-figures-annually-e-commerce-bernie-thompson-ceo-plugable/
Fri, 21 Apr 2017 20:08:50 +0000http://amzsecrets.com/?p=6031https://amzsecrets.com/84-former-ibm-employee-now-pulls-8-figures-annually-e-commerce-bernie-thompson-ceo-plugable/#respondhttps://amzsecrets.com/84-former-ibm-employee-now-pulls-8-figures-annually-e-commerce-bernie-thompson-ceo-plugable/feed/0Bernie built an 8-figure electronics business, wrote the book "Flywheels and Feedback Loops: A Guide to Success for Amazon Private-Label Sellers", and released the tools he used to automate the building of his own brand on Amazon. These tools are available at efficientera.com
In this episode, you'll learn:
How Bernie grew his team
When to add team members to your growing amazon business
When to buy and puchase more inventory
Critical decisions that led Bernie to where he is today
Payroll, accounting
Why he started his e-commerce company, and where he is taking it to
Hiring decisions
Inventory control and strategic advice
Where he see's the e-commerce space going
How he's up against massive corporations
His customer support is killer
And much more!
DAVID ALADDIN: Great to have you on the show, Bernie!
BERNIE THOMPSON: Oh, thanks David! Glad to be on!
DAVID ALADDIN: Can you take us to the beginning before pluggable, before everything? Where did your journey begin?
BERNIE THOMPSON: Yeah, you know, actually, I have actually always been interested in technology, so, I got a computer science degree, worked at IBM in the 1990s, and worked at Microsoft in the 2000s, and started an electronics company in 2009 selling on Amazon. And that’s led to that being a pretty successful business and also we developed a lot of tools to make that business successful and now I’ve got a second business offering that tools to other Amazon sellers.
DAVID ALADDIN: So, why did you decide to leave IBM and Microsoft in the first place?
BERNIE THOMPSON: Yeah, yeah, you know, I think, you know, every job has its pros and cons. Actually, I love big companies. Big companies are cool. You know, you’ve got a big support structure around you. You know, at IBM I worked on OS2 which is an operating system that probably everybody’s forgotten about at this point. And at Microsoft I worked on tail end Windows NT and Windows 98, and worked on tail end Windows XP and Vista. So, you know, I was a cog in a pretty large machine, but I got…my stuff got seen by a lot of people. But I love small companies. Especially when small companies are successful there’s nothing that beats it in terms of good experience.
DAVID ALADDIN: So, in 2009 you decided to quit and you started a startup that just started launching products on Amazon, is that before FBA was launched? I believe so, right?
BERNIE THOMPSON: No, actually FBA had already kind of been opened up at that point. So, we were able to bet on FBA from day 1, which was a key part of it. You know, I really wanted to focus on the technology, on the customer support, and not have to think about the other things. You know, frankly I am terrible at sales marketing. And so, being able to, you know, kind of hand that off to Amazon and the significant part of the logistics which is something I had really no experience in physical goods. I am a software guy. So, being able to handle in most of that physical goods aspect to Amazon, you know, it was a big deal. I mean, it really enabled me to focus on what I was good at and that probably made the difference in terms of the business being successful.
DAVID ALADDIN: And when you left your job, did you just put everything behind you and you just moved forward with the startup, and how much…how much capital did you have when you started the startup?
BERNIE THOMPSON: Yeah, you know, electronics is a pretty brutal category. You know, if you are going to do anything interesting or you know, even kind of innovative a little bit, you need to have pretty high MOQs and the average price that you are paying is pretty high. So, yeah, I mean, you know, it wasn’t quite a million dollars, but basically, you know, just under that was sunk into the business with cash by the first year or two. And it actually took five years to the point where I could get cash out of the business, which is, you know, it’s a long time.
Bernie built an 8-figure electronics business, wrote the book “Flywheels and Feedback Loops: A Guide to Success for Amazon Private-Label Sellers”, and released the tools he used to automate the building of his own brand on Amazon. These tools are available at efficientera.com

In this episode, you’ll learn:

How Bernie grew his team

When to add team members to your growing amazon business

When to buy and puchase more inventory

Critical decisions that led Bernie to where he is today

Payroll, accounting

Why he started his e-commerce company, and where he is taking it to

Hiring decisions

Inventory control and strategic advice

Where he see’s the e-commerce space going

How he’s up against massive corporations

His customer support is killer

And much more!

DAVID ALADDIN: Great to have you on the show, Bernie!

BERNIE THOMPSON: Oh, thanks David! Glad to be on!

DAVID ALADDIN: Can you take us to the beginning before pluggable, before everything? Where did your journey begin?

BERNIE THOMPSON: Yeah, you know, actually, I have actually always been interested in technology, so, I got a computer science degree, worked at IBM in the 1990s, and worked at Microsoft in the 2000s, and started an electronics company in 2009 selling on Amazon. And that’s led to that being a pretty successful business and also we developed a lot of tools to make that business successful and now I’ve got a second business offering that tools to other Amazon sellers.

DAVID ALADDIN: So, why did you decide to leave IBM and Microsoft in the first place?

BERNIE THOMPSON: Yeah, yeah, you know, I think, you know, every job has its pros and cons. Actually, I love big companies. Big companies are cool. You know, you’ve got a big support structure around you. You know, at IBM I worked on OS2 which is an operating system that probably everybody’s forgotten about at this point. And at Microsoft I worked on tail end Windows NT and Windows 98, and worked on tail end Windows XP and Vista. So, you know, I was a cog in a pretty large machine, but I got…my stuff got seen by a lot of people. But I love small companies. Especially when small companies are successful there’s nothing that beats it in terms of good experience.

DAVID ALADDIN: So, in 2009 you decided to quit and you started a startup that just started launching products on Amazon, is that before FBA was launched? I believe so, right?

BERNIE THOMPSON: No, actually FBA had already kind of been opened up at that point. So, we were able to bet on FBA from day 1, which was a key part of it. You know, I really wanted to focus on the technology, on the customer support, and not have to think about the other things. You know, frankly I am terrible at sales marketing. And so, being able to, you know, kind of hand that off to Amazon and the significant part of the logistics which is something I had really no experience in physical goods. I am a software guy. So, being able to handle in most of that physical goods aspect to Amazon, you know, it was a big deal. I mean, it really enabled me to focus on what I was good at and that probably made the difference in terms of the business being successful.

DAVID ALADDIN: And when you left your job, did you just put everything behind you and you just moved forward with the startup, and how much…how much capital did you have when you started the startup?

BERNIE THOMPSON: Yeah, you know, electronics is a pretty brutal category. You know, if you are going to do anything interesting or you know, even kind of innovative a little bit, you need to have pretty high MOQs and the average price that you are paying is pretty high. So, yeah, I mean, you know, it wasn’t quite a million dollars, but basically, you know, just under that was sunk into the business with cash by the first year or two. And it actually took five years to the point where I could get cash out of the business, which is, you know, it’s a long time.

DAVID ALADDIN: Yeah, I’ve started pulling out cash mainly cause…Yeah, my main income source now and in the event I get suspended, I want to be able to have some type of bubble to like just relax on and not worry about paying the bills or anything.

BERNIE THOMPSON: Yeah, no, it is tough. I mean, you know, we started in 2009, so here we are in year 8, and I’ve paid way more to the Government in taxes, and I’ve got way more stuff sitting out in the warehouse, you know, that’s potentially unsellable if there’s an account suspension. There’s way more in either of those categories than the amount of cash I’ve taken out of the business so far.

DAVID ALADDIN: Let’s talk about the e-commerce company that you started. You started this company in 2009. Why did you go into electronics?

BERNIE THOMPSON: You know, I went into electronics because it’s my passion. So, you know, I…when I was working at IBM and working at Microsoft, what I was actually worked on, was device drivers and device technology. At IBM I worked on the graphics drivers for OS2. I worked on the original SVGA driver. In fact, as an intern I took the IBM VGA driver which was an assembly language and modified it to work with the new generation of SVGA cards, you know. And then, you know, later on in my carrier working at Microsoft I managed the USB and Bluetooth teams.

So, it actually starts with a passion for the particular technologies, the pluggable technology sales, which is basically USB and Bluetooth devices. So, you know, it’s quite different than a lot of other Amazon sellers. I didn’t do this as a money making opportunity first and then I picked what I did. I picked what products I wanted to do first and then just wanted a sustainable business that was profitable. And despite what I said about cash, cash is tough, but in terms of actual profitability, the business actually has been profitable every year since we started. Just the cash has to go back into the business because there are such heavy inventory requirements and you know the need to you continue moving new products while you are to keep up with the competition, especially, you know, the very fast moving competition from China.

DAVID ALADDIN: I came like from a software background as well and you know, switching to this e-commerce side of the business, take so much money to run these e-commerce businesses. I’m guessing going drivers to physical products must have been kind of like an eye-opening. It’s like: ah, I just sold a lot, but now I need to refill this inventory.

BERNIE THOMPSON: Yeah! No, it really was. I did realize how tough it would be on cashflow, you know. And Amazon, you know, has their landing programs which is not huge amounts of money, but basically, you know, I think out of the eight years we’ve been in existence, probably four of those years we took advantage of the Amazon landing to get over the holiday sales bubble on sale side and the Chinese New Year supply disruption that occurs every year. So, you know, that’s how we got through this. But, yeah, absolutely! I mean, I’ve been fortunate enough to do a lot of different things in my life.

You know, I had worked in number of chip companies; I worked at S3, the graphic ship companies in the 90s and DisplayLink, another USB graphic ship company in the 2000s. You know, and I’d seen…I mean, that’s perhaps an even more brutal business. In those businesses you have to sink a few million dollars into taping out a chip, you know, before you even get your first dollar of revenue. So, I’d seen a couple different businesses in terms of cash requirements. So, while I didn’t quite know what I was getting into, I had at least a little bit of inkling.

DAVID ALADDIN: I actually remember reading that in your book that you signed me, in the “Flywheels and Feedback Loops” with the Amazon loans that you are talking about just slightly earlier. You mentioned that you shouldn’t take out the Amazon loans due to the high percentage that they charge you?

BERNIE THOMPSON: Yeah, the rate isn’t super favorable. It’s the ease of the landing which is why you might take them and why we took them frankly. You know, if you go with the traditional bank lender, you are going to, you know, have a long process with a lot of paperwork and having to expose, you know, all of your financials to them, and they’ll have them all. But if you get them to say yes, you know, your rate is going to be lower than the Amazon rate. With Amazon it’s just, you know, they have a perfect inside into your…at least the Amazon part of your business. And they’ll just offer you a loan. They’ll just say: hey, we are willing to land you $200.000 and you just click okay, and click this agreement and boom-the money drops in your bank account. And it’s a short-term loan too. So, you know, once you choose your term, three months or six months, and pay it off, you don’t need to worry about it after that, where’s the bank it’s more kind of complicated long-term relationship.

DAVID ALADDIN: For me like the loan amounts are not like very large amount, but you are an eight figure salary, like how big of a loan did they offer you?

BERNIE THOMPSON: They have… The loans have not been too useful for us in recent years because they are just not big enough to move the needle.

DAVID ALADDIN: Exactly, yeah, it’s not worth it. But okay, cool. So, for five years you didn’t take a single dollar out of the business?

BERNIE THOMPSON: No, no.

DAVID ALADDIN: What is your thought process there?

BERNIE THOMPSON: I couldn’t. I mean, if I was going to grow… Basically you get trapped if you are growing. And if you are profitable and growing, you know, you are paying a high percent of your earning to the Government each year in taxes, at least if you are a US company. You know, anywhere between…you know, if you are very profitable, between 30 and 40%. And then basically that other 60 to 65%, that of those profits are inventory often grew by at least that much each year. So, yeah, it really went into inventory growth. And you know, we’ve never been very aggressive about the various strategies there are out there to move your cash up, you know, in terms of, you know, getting terms from your suppliers, getting other things. But ultimately those things are loans too, just in a different form. So, we’ve been conservative in a sense that we don’t want to ever, you know, like have an account suspension or some sort of a negative event and then get caught owing people a bunch of money. So, we haven’t tried to be aggressive about, you know, shifting things with supplier loans around. A lot of other people are though, and it could be a good idea for people.

DAVID ALADDIN: Have you experienced an account suspension since 2009?

BERNIE THOMPSON: We have not. We have not experienced an account suspension.

DAVID ALADDIN: It’s impressive!

BERNIE THOMPSON: But it’s interesting, you know, we… You know, part of what we do is these tools that we market to other sellers and that’s cost us to really be well-networked with the selling community. And account suspensions are happening all the time, and the reasons, you know, it’s not just happening to people who are really, you know, doing bad things. There’s… Account suspensions are serious risk that every seller, no matter how, you know, kind of good and diligent they are, do need to take seriously and, you know, it’s a huge issue.

DAVID ALADDIN: So, let’s go back. When you started your Amazon business, did you, guys, start with a few employers? Did you… Was it just you?

BERNIE THOMPSON: Yeah, when we started in 2009 it was just me. I mean, one of the… I enjoy doing all aspects of the business, including even… I mean, it was novel for me at first, working with physical goods. You know, I loved kind of coming up with creative solutions for things. I was importing container load shipments into the port of Seattle, which I mean the Seattle area, and would have them delivered to a customs warehouse, and I would rent a YouHold truck for the day and drive down there, and load those boxes into the YouHold truck and then have pre-printed all my Amazon labels to send to the Amazon warehouse, and I’d, you know, label all those boxes up and, you know, park into a hole inside the road, label those boxes and then drive them straight to UPS the same day. So, yeah, that was really the first few years.

DAVID ALADDIN: That’s scary! No, I mean, I thought about doing that! Like, when I first started, I was like: maybe I could save some money picking up inventory from like the warehouse that gets it from the ocean fairy. And it just seemed like a lot of work!

BERNIE THOMPSON: Oh, yeah, well, you know, it was a lot of work. And do what you have to do. And so by the spring of 2011, I mean, I was basically working flat out. I was doing all the customer support on the product, I was doing all the sourcing, all the accounting, all the logistics. And so, we got into the point where the revenue could support a few employees. And so, I hired the first employees, I hired three all at once in the spring of 2011.

DAVID ALADDIN: Oh! I am actually been debating when to hire my first few employees, not the virtual assistants, but actual employees. What number where you at like revenue-wise…maybe profit-wise would be better?

BERNIE THOMPSON: Yeah, profit-wise, profit-wise I was at enough to just pay their salaries.

DAVID ALADDIN: Right, so… I kind of want to ask you the number, but is that too personal?

BERNIE THOMPSON: Yeah, it’s probably too personal…

DAVID ALADDIN: Okay…

BERNIE THOMPSON: But you can do that math.

DAVID ALADDIN: Yeah, yeah!

BERNIE THOMPSON: I mean, I think it’s, you know… Every time you… I mean, the other alternative is that you wait until… You do it sooner and you are losing money. You know, but I think that’s dangerous, because in at least my view of the World, you know, I like to grow organically and I don’t like to get ahead of myself, because that’s how you can, you know… If your expectations turn out to be not true, you are dead. You know, if you are not prepared, you know, you are kind of betting on a certain amount of growth and then it doesn’t happen… So, you know, I’ve really tried with all the businesses I’ve done, and there’s…you know, there’s others that I’ve done, you know, to try to make sure that the growth is organic and that we have the revenue and the profitability to support, you know, new cost structures before we take them on. You know, that’s a pretty conservative approach. I think there’s, you know, there’s some businesses where you, you know, want to invest and kind of take that larger risk.

You know, but this is also a self-funded business, you know, I don’t have any outside investors. So, you know, we’ve really kind of built this business a different way, you know, where we are focused on stability and organic growth. And you know, despite all the risks on Amazon, you know, through diversification and through being conscious about things like this, we’ve actually been able to, you know, pull off eight years of, you know, of growth even though, you know…probably other people would look at the business and go: well, you know, you had a lot of opportunities along the way to really accelerate that growth by taking on…you know, doing things sooner, or taking on more debt, other things. And in most of those decision points we chose the more conservative route.

DAVID ALADDIN:I love this conversation cause I’ve been trying to increase the stability, regardless of what happens on the Amazon. So, why you are building this business? You just keep putting all the money into inventory, or did you hold like 20% into the bank? How did that look like?

BERNIE THOMPSON: Yeah, I mean, trying to keep cash cushion in the bank. But I don’t think if I would think about it in terms of overall percentage of assets. It was just making sure that we had several months of working capital at any point, you know, so for example if you get a, you know, a temporary listing or account suspension and your revenue is disrupted for a few weeks, that that isn’t the end of your business. You know, and so I think at any given point we could survive, you know, a few weeks, possibly a few months of complete revenue disruption and it wouldn’t put the business under. But that about the only goal! I mean, I probably didn’t keep much more cash than that.

DAVID ALADDIN: That’s interesting! It is like… It reminds me of like Apple, you know, like they keep billions of dollars just as a cushion, you know, for those rainy years.

BERNIE THOMPSON: They’ve got, you know, these advanced strategies that only the large companies have where they’ve had that money be taxed overseas often at extremely low rates, like they negotiated a ridiculously low rate with the Irish government and as long as they don’t bring the money back to the US, they don’t get further taxed. As soon as they bring it back to the US, they have to pay US rates. So, Apple and other big companies like that, have paid very little in taxes, but they’ve got billions trapped overseas that they can’t bring back home, you know, to invest in US.

DAVID ALADDIN: Let’s trump back a little bit. Like what was the decision with hiring three employees all at once?

BERNIE THOMPSON: I think, there’s a simplicity when a business is a one person business. You know, there are a lot of things that you don’t need to think about yet because, you know, the processes of the business, the structure of business only has to serve your needs. And so, you know, I think that… You know, I’ve been through hiring employees before and I just knew there was a certain amount of complexity I would have to absorb as soon as I had employees. Complexities for me in terms of I go from being, you know, just I do stuff every to where I need to manage people and make sure that I’m doing right by them and paying attention to their needs, and processes like accounting and payroll.

So, basically I waited a little longer than I otherwise would have, you know, and then at that point, you know, could afford to and really needed to hire several people. And then that also gives the team a little bit of stability, you know, that… You know, one of the scariest things when you are sitting there with a company with three employees, or six employees, is…and everyone is really busy, is one employee leaving means that you are workload by double, you know, cause you got to cover for them until you, you know, get that position covered.

So, you know, probably also left a little bit of slack in the business in the early years for the early employee such that, you know, if we lost somebody…and we did, we like all businesses, we lose people from time to time, you know, that it didn’t kill us, you know, and specifically, that it didn’t me because very often it’s the boss is next guy up the chain who has to take the load, you know, when somebody suddenly disappears.

DAVID ALADDIN:I was actually…I was watching some your guys YouTube videos. There are super elaborate! Like, you guys are not just put a slap in a label on a product! You are going into the electronic components and figuring out what are the best components to put in and the technology is almost…it is proprietary.

BERNIE THOMPSON: Well, you know, and some of the products are…you know, we know all the underlying technology, all the underling chips and we kind of start from that level. And that’s where I come from. I mean, I worked, you know, being a device developer and having worked in a couple chips companies, you know, that’s my background. But then very often, we’ll just kind of go look across the industry and find somebody who’s doing the product we would have done, you know, factory. And then we’ll just go with that product. And then we are good. In other cases we actually find that there’s nobody doing the product that we would want to do. And then we have to find the closest factory and begin working with them to improve their product to have it be the product we would have done.

So, it’s certainly a lot of work that goes in there. And you know, I often say we are an electronics company first and an Amazon seller second, and you know, kind of how we do product development and how we communicate about the products kind of is, you know, indicative of that.

DAVID ALADDIN: With electronics I feel like there’s a lot of customer support involved in terms of glitches and especially with drivers and this is incompatible with that… How do you guys optimize on your customer support?

BERNIE THOMPSON: We just spend a huge amount of money on it. You know, I have at this point fifteen employees, you know, so a huge co-structure that’s just supporting the products.

DAVID ALADDIN: Wow!

BERNIE THOMPSON: So, yeah, I mean… If we had the same sales with a product that didn’t have such intensive customer support requirements, we’d have…well, at least twice the profitability. At least half of what would have been our profitability is sunk back into customer support…actually a little over half.

DAVID ALADDIN: Yeah, it’s almost scary in a sense that you have that much dedicated customer support.

BERNIE THOMPSON: Yeah, but it’s essential in electronics, because, you know, I mean that’s one of the, in a sense, good things about Amazon. Is that if you try to launch an electronics product and you don’t have good customer support, you just going to see your review rating deteriorate and that product won’t sell! You know, there are a few years where, you know, there’s this massive gaming of the review system going on where people are basically just buying reviews. And for us, that was pretty devastating actually, because, you know, it meant that, you know, companies actually making customers happy mattered less because people could just buy reviews. And we actually never did that.

So, I was actually really happy last year when Amazon began cracking down on that. And I know there’s still a lot of rig-gaming going on out there, you know, when I get a chance with Amazon, you know, I encourage them to, you know, kind of maintain the integrity of the review system. Because, you know, at least for us it’s what enables us to invest that much back into customer support and have that make sense, because, you know, if we are investing that huge amount back in customer support and we are getting rewarded with a higher average review rating, well then, that’s a business that works. If, you know, if it doesn’t work that way and reviews are fake, or there is no feedback loop like that, well, then we can’t afford to invest that much in customer support.

DAVID ALADDIN: Let’s talk about like some of the biggest mistakes that you’ve made. We’ve all make massive… I’ve made tons of mistakes. But you’ve been in it a lot longer. So, what kind of mistakes have you made?

BERNIE THOMPSON: So, all kinds of mistakes, obviously. You know, we see a product going up like a rocket ship and we say: man, we got to be aggressive in placing purchase orders to stay ahead of this guy. I almost hate products that take off in late summer, because what would end up happening is because of the holiday bubble we need to stock up anyway at that time and so then if we’ve got a rocket, we’ve really got to stock up on that.

Well, in several cases, you know, we’ve got products that those early signals were in a sense false signals and whether it was because of reviews deteriorating, or just, you know, just general competition, or we got luck in the early days, you know, the products sales deteriorated and then we were stuck, you know, sitting on hundreds and thousands of dollars of inventory. And that’s happened, you know, quite a few times. You know, and… But it’s a hard problem to avoid. I mean, I guess, you know, I have the other problem happened too which is, you know, there’s rocket happening, products that’s really ramping up and you know, the… You don’t get a lot of rockets. You don’t get a lot of products that just get fire. And so the most important thing to do when you do is to stay in stock. And so we’ve also had correspondence circumstances where, you know, we think we are being aggressive in placing large and early purchase orders and it’s just not enough stock, and we run out of stock, and the momentum gets killed, and the product is, you know, not nearly as big as it could have been if we were able to stay in stock.

So, it’s a really tough challenge. And you know, with electronics the lead times are really long. You know a lot of our components… It is because not only do you have the ocean time because, you know, some of these products, their power adapters are pretty heavy, you know, and not only do you have the factory time which has gone up since the economic downturn and factories tend to be a little busier. But with electronics you also have a lot of component time issues. You know, work the individual components within the product, and have a month or two delay on them, so… We have… It’s not at all uncommon for us to see from the time we place a purchase order to when we get the goods, that we are looking at four months or, you know, or maybe five months.

DAVID ALADDIN: Yeah, honestly I hate the four to five months delay time too because it really holds up a lot of capital. It could be bad if it’s a large volume order that you put in and it actually forces you to put more, you know, bigger purchase order because of delay time.

BERNIE THOMPSON: Yes.

DAVID ALADDIN: I think especially if you are starting, that’s a massive problem, because you are tied on capital.

BERNIE THOMPSON: Yeah, and Amazon is such a dynamic market. I mean, you make that decision, the whole World could change in four months as far as the competitive picture for that product.

DAVID ALADDIN: So sure!

BERNIE THOMPSON: Yeah!

DAVID ALADDIN: And you know, the price could be 1/3 the cost of what you are selling at the time, you know, that you put the order in.

BERNIE THOMPSON: Yeah!

DAVID ALADDIN: At least the market price could be, you know. What other mistakes have you made? Oh, by the way, let’s talk about the logistics that you’ve… Do you tend to manufacture all your goods, ship it to Chinese warehouse and then ship it to the US, or how does that look?

BERNIE THOMPSON: Yeah, we do not have a Chinese corporation, so we can’t ship to Chinese warehouse. I mean, we can’t hold the goods in China in our name. So, basically the goods have to leave China once we’ve purchased them from the contract supplier that we are using, and we use a bunch of them, so, that’s difficult. And you know, there’s a whole bunch of structural advantages that our Chinese selling competitors have. And that’s one of them, you know, they can, you know, just hold their goods there in China and then just more trickle them out to the US, you know, and that’s a big deal. And not just to the US, you know, globally.

DAVID ALADDIN: Yeah, I think you’d save more if you would like get everything into one container and fill it fully rather than sending multiple shipments, LCLs.

BERNIE THOMPSON: Not too much though, I mean, there’s some saving there, but we don’t… There you are talking often about, you know, high hundreds, or thousand, or two thousand dollars on that whole shipment difference between, you know, whole container and going LCL. And compared to other optimization opportunities, that particular one is not one I worry about too much.

DAVID ALADDIN: And I am guessing you don’t go to that warehouse by the port now with the UPS truck, or…?

BERNIE THOMPSON: No, never! Haven’t actually seen any of the custom bonded warehouses in a few years luckily!

DAVID ALADDIN: Yeah, I you notice you actually store some of your goods at your office, it’s like a warehouse office, is that correct?

BERNIE THOMPSON: Yeah, yeah!

DAVID ALADDIN: Do you guys still do that? Or is that an old photo?

BERNIE THOMPSON: Yeah, we do.

DAVID ALADDIN: Or is that an old photo?

BERNIE THOMPSON: No, that’s not an old photo… You know, basically the, you know, the early years of Pluggable, we had a warehouse less -a 100% of what we did we would sent in FBA warehouses and then everything that we sent to other places came from FBA. But basically the long-term storage fees changed all that. You know, the long-term storages fees which were imposed between six to twelve months, when inventory sits there six to twelve months, means that we can’t, you know, take a large purchase order and you know, that might…You know, it’s a new product. WE don’t know how long it’s going to take to sell. And we can’t just send that all to the Amazon warehouses now. So, basically once Amazon started imposing those punitive long-term storage fees that we were at a scale at that point anyway where it caused us to, you know, take a lease on a warehouse and now we use that warehouse as our primary hub.

DAVID ALADDIN: It is cool! I don’t know, it’s something that’s cool about having warehouses. Especially, if you are like used to using FBA only and then you have these warehouses. It’s kind of like a nice cushion that you have, this inventory that you can continue to fill.

DAVID ALADDIN: Okay, so, going back to the three employees, did you have an office before that, or did you get the office and the three employees all at once?

BERNIE THOMPSON: Yeah, that was another thing, there was another reason to hire the people all at once as we did not have an office, we worked out of the … the whole business was out of the house but at that moment where we got the three employees, we also got a lease; we are here at a pretty expensive area – Bellevue, Washington – actually just a mile or so … so the first Pluggable office was about a mile away from the house that Jeff Bezos started Amazon in. We could actually almost see the house that Jeff … because we are kind of up on a hill by some railroad tracks, we are kind of on the wrong side of the tracks, on a hill, overlooking Bellevue and I don’t know if I could quite see it but almost in the distance was the house that Jeff Bezos started Amazon in. And it was an ugly, green, converted house, really a terrible thing and so we kind of squeezed the three of us in a section of the house, they had kind of broken the house into pieces and were leasing it to different companies and we were kind of tucked in the back corner.

DAVID ALADDIN: I was actually thinking about buying a house near Jeff Bezos too; that is for like a ranking boost.

BERNIE THOMPSON: Well, this was, you know, this was … the house I am talking about, the Jeff Bezos house was a rented house that Jeff basically ripped out the mailbox and stuck in this new, gigantic mailbox that he could get all of these book catalogues and this is in the mid-90s and he actually … this was back when Amazon was just a book-selling company. And then after that phase, I don’t know how long that phase lasted for Amazon but certainly, as soon as he started having enough employees, they left that house and they crossed the lake and they are over in Seattle now and a little way is the way.

DAVID ALADDIN: I feel like you had a very pivotal moment, I mean, there are three employees plus office, all at the same time. What was going through your head? Were you nervous about doing that or …?

BERNIE THOMPSON: Yeah, absolutely! Because you feel a sense of responsibility to those people. Yeah!

DAVID ALADDIN: And … I mean, it did increase the overhead tremendously too into the business.

BERNIE THOMPSON: Yeah, I mean, the business … actually, right, no, I really debated that, I asked myself the question “Do I want this to be a one person business which is kind of a beautiful thing or do I want it to be bigger” and I actually probably delayed a few months, you know, pondering that question because at the moment I hired those three employees basically I took a highly profitable business and made it a lot less profitable. It was still, you know, again, I was conservative and so it was still profitable but I had eliminated … I am pretty sure at least well over half of the profitability by making those three hires so I was betting on growth at that point and it was really going to become a very different, larger business at that point.

DAVID ALADDIN: That is awesome and it obviously worked because you have been scaling up the employees and your productivity must be a lot higher now.

BERNIE THOMPSON: Yeah, I think so. Some days it feels like not, right, you are dealing with people issues, you know, you get a bunch of business owners together and I think the one thing they would all agree on is the hardest part of their job is people. People are … especially, you know, engineer-types, you know, people are just not as compliant as code.

DAVID ALADDIN: Very true!

BERNIE THOMPSON: Which maybe gets (inaudible) era, I don’t know.

DAVID ALADDIN: I was actually, you know, I was looking at your e-commerce site; it is set up differently than most e-commerce sites. You guys are content-first driven … when I went to the front page, there are a bunch of blogs listed and then you guys have your shop. Let’s talk about the strategy there. What is the mindset there?

BERNIE THOMPSON: Well so, you know, our e-commerce site www.efficientera.com is … one of the things I haven’t said is really starting even when it was just me. I was developing automation to help do a lot of different things like even before I hired those first three employees, we were sending out emails for every order. Well, obviously I wasn’t going to be doing that personally because I was doing everything and so I am a software developer so I wrote some code to send out those post-order emails, you know, I had a lot of spreadsheet automation for accounting, for keeping track of inventory, pulling in Amazon reports and pushing them to Google Docs, things like that.

So, over the years the software kept evolving, getting bigger and bigger and I started having other employees, you know, developing and maintaining this and it kind of got to the point where “Holy Moly”, you know, we are investing a huge amount of money in this software and it is really just for the benefit of one selling business, you know, this doesn’t make sense. We should either drop this or adopt some other software or we have to really invest in this in which case, you know, we got to offer it to other sellers.

So, you know, about two years ago we started the process of taking these years’ worth of software that had helped make Plugable successful and refining it to where we could offer it to other sellers and that is www.efficientera.com. And yeah, we definitely have focused on, you know, communicate and help sellers through a lot of content so we have got, you know, a really rich set of blog posts and of course, the tools themselves awesome, it is just all of this stuff is focused on private label because that is what we were, you know, so all of the feedback loops with the customer, everything with encouraging positive reviews and mitigating negative reviews, we have all kinds of white-hat strategies but ones that require doing things really consistently and doing things in a timely manner.

And then all that kind of reporting to stay in stock and for private labels, sellers, one of the big issues nowadays is it is so hard to keep the content on your listing stable because everyone is constantly trying to overwrite your content even if you are in the brand registry. So we have got a lot of monitoring and so we are sending a lot of emails to you as a seller, letting you know of things happening on Amazon that Amazon doesn’t let you know about it and some of those things can be the key to keeping a product in stock or heading off a listing problem before it starts hurting sales and things like that.

DAVID ALADDIN: But even with your e-commerce site Pluggable, you guys have blog posts there on the front page and it is not about trying to sell the customer first, it is actually … it is teach you guys what this product is about.

BERNIE THOMPSON: Yes.

DAVID ALADDIN: Which I thought was really cool, you know, I actually don’t do the … mine is more like images and kind of trendy but yours is very content-driven, very focused … do you guys thrive a lot of organic traffic that way?

BERNIE THOMPSON: We do, yeah, it is definitely a content-management strategy and the content is not marketing content, it is support content and education content. The good thing for Pluggable with USB and Bluetooth devices is, you know, they are interesting and there are a lot of different things you can do with them that people don’t realize and there are also a lot of problems frankly. And so we try to communicate about all that, you know, we try to highlight the problems so that people will know about them and not buy the product rather than the alternative which is that they, you know, we haven’t communicated about the problems, they buy the product and they are pissed off and they give us a 1-star review. So yeah, a lot of … it is also nice, you know, coming from the software world selling physical goods because they are really visual, you know, we can do these videos where we really kind of show “wow, you know, you can have seven monitors connected to Windows PC”.

DAVID ALADDIN: That is really cool! I think you don’t give yourself enough credit, I mean, for those listening – some of his videos have over half a million views on it and he is like an influencer and like the monitor scene – I would literally just keep pushing on videos at that rate, I mean … half a million views per video – that could equate to tens of thousands of sales.

BERNIE THOMPSON: Absolutely! It is, you know, and we are trying to do that I just … I have to get in front of the camera more like you say.

DAVID ALADDIN: You need to split yourself into two people.

BERNIE THOMPSON: Yes!

DAVID ALADDIN: I was surprised because like you are doing the videos, even though you have like ten employees, you still haven’t found someone to go on … well, actually there was someone else on the YouTube video I remember seeing.

BERNIE THOMPSON: Absolutely, yeah! We have bunch of people here doing videos. No, absolutely! We have tried to, you know, say we are going to have a couple of different kinds of videos that are really aligned with our people and what they are comfortable doing, you know, I tend to do the more tech-y videos just because that is me but I have a bunch of other people who are also tech-y and some that are, you know, less and yes. So, there are a lot of different videos up there and we even … each year we do April Fools’ Day video where we just kind of get really wacky …

DAVID ALADDIN: “None of our devices work”!

BERNIE THOMPSON: Right, yeah!

DAVID ALADDIN: On April Fools’ …

BERNIE THOMPSON: Yeah, I would encourage you to go back and look at the Pluggable videos from April 1st … not this year, we didn’t … I was too busy this year, I didn’t do one but all the past years and we have got some god ones.

DAVID ALADDIN: What keeps you up at night?

BERNIE THOMPSON: There is a lot, there is a lot, you know, I think … our number 1 … so I started this business in 2009, Anchor started in 2009, Amazon Basics started in 2009, so I think it is tough right now for somebody if they want to go into electronics because this is, you know, a lot has played out and a lot of this is a momentum game and if I worry about two companies, it is probably those two. And out of the two, I worry a lot more about Amazon Basics, you know, when Amazon comes into our products with their own brand, it absolutely kills off the top … whatever spots they take which is usually the top spots for that category or for those keywords.

And we have had that happen over and over again, we were the number 1 seller of USB hubs in 2011, 2012, I think part of 2013 and then Amazon Basics basically identified our supplier probably because they looked at who was the top hub and where they are sourcing those hubs from and they came out with a line of Amazon Basics hubs from the exact same supplier we use and it basically killed off that market for us. So Amazon Basics keeps me up at night, the wave of sellers coming from China keeps me up at night, I mean there is absolutely, you cannot believe what is happening in China right now, I mean, there are massive business parks with significant government funding, they are just launching hundreds or thousands of e-commerce companies that are very Amazon-focused. Five years ago when we would talk to a factory about Amazon, they would go “Oh, we have got a couple of customers selling on Amazon too”.

Today, that same factory almost always has a house brand that the factory owner also has some brands either out in the open or secretly that they are selling directly on Amazon. So we are competing with the same Chinese factories that we are sourcing from. That keeps me up at night and then Amazon. Amazon has this flood of sellers hitting a platform, they have a philosophy at Amazon of “shoot first, ask questions later” when it comes to listings’ suspensions and accounts’ suspensions and they are shooting for the bad guys but, you know, good guys get hit in the cross-fire all the time. And, you know, at times it can feel like, you know, selling on Amazon is a short-term proposition just because so many …

DAVID ALADDIN: Variables …

BERNIE THOMPSON: Yeah, so many variables and so many other sellers just getting knocked out entirely. So, you know, we don’t just sell on Amazon, we sell on Wal-Mart, on eBay, on Newegg; we distribute through Standard Electronics Distribution. When we get a listing suspension, you know, very often there are other people selling our products who can come in – they are often at a higher price but at least they are offering the products – but still, you know, it really feels like the Amazon part of our business is unstoppable because Amazon, you know, has just been eating market share from everybody and yet so fragile because the way Amazon’s processes work is …

DAVID ALADDIN: It is cut throat.

BERNIE THOMPSON: It is cut throat and then in the end sellers are expendable. Amazon has a maniacal focus on customers and sellers are not customers.

DAVID ALADDIN: Is there a solution to this? I don’t know.

BERNIE THOMPSON: Yeah, I don’t know, I mean I think that, you know, I wish that, you know, at this point, you know, we bet on Amazon and I love Amazon, I mean I think there are a lot of good things about Amazon and what they have done, they have innovated in huge ways, you know, but at this point, sitting here in 2017, you know, I wish there was more competition in the e-commerce marketplace world. I hope Wal-Mart is able to become competitive because they haven’t been, you know, so I think that that is one potential answer as that we don’t keep trending towards a monopoly in e-commerce owned by a single company – Amazon.

DAVID ALADDIN: I think you hit a point that has been on my mind for a long time. It is almost … if you are not on Amazon, you are in trouble in a sense or if you have been on Amazon and then you get knocked off of Amazon, you are in big trouble because you have got all this inventory, you know – what do you do. It almost shouldn’t be a privilege unless you go to jail or something, you know.

BERNIE THOMPSON: Right, yeah.

DAVID ALADDIN: Because they have dominated the entire Internet in terms of buying stuff so for one person that is outside of, you know, it is kind of like the gatekeeper to e-commerce, everyone just shops there and … it is kind of weird.

BERNIE THOMPSON: In the United States today, that is a true statement …

DAVID ALADDIN: I think it is 55% of all online goes to Amazon so …

BERNIE THOMPSON: Yeah. Now, outside of the US it is a little different, it is a little bit more competitive but in the US – absolutely. I mean, Amazon has just been eating market shares for years and if you can’t find some way … if you are a manufacturer, private label, seller, if you cannot reach Amazon, I mean, like you say – you can’t probably, you know, be successful and then if you have had run raids that assume the Amazon market and then even if you are perfectly reaching all the other markets, which is hard to do because the other markets are very fractured. Yeah, there is another 45% out there but that are markets that are hard to reach because a lot of them are old markets where you need armies of sales people to reach those markets and things like that. Even if you are reaching all those, you know, if you suddenly have half your sales go away, it is very unlikely that your business is going to survive.

DAVID ALADDIN: The other 45% it could be like, you know, Pluggable, you know, your website. I can’t list my products on your website so it is not really a channel that is available to everybody. So it is just pure dominance, it is scary at the same time but … if you are listening Jeff Bezos – you have got to ease up a little bit, you know, we have got your neighbor on the line.

BERNIE THOMPSON: Hey, don’t get me in trouble with Jeff!

DAVID ALADDIN: You know, you could always like … he probably goes to the coffee shops around there, you know.

BERNIE THOMPSON: I have been in a restaurant where Jeff was in … just happened to be in the restaurant so …

DAVID ALADDIN: Really? Very awesome! And you actually … you have connections with Amazon Corporate as well, I mean, you have a video that … your main video on YouTube is produced by Amazon. Correct?

BERNIE THOMPSON: Yeah! Amazon … let’s see, it was a year and a half ago, did a really nice video series called Day One. It was done by the marketplace team interviewing a bunch of sellers and I think they probably interviewed 30 sellers maybe and ours was one of them; a really nice video series and actually a good one if you have time to go watch those because those are some of the top Amazon selling companies. They knew exactly who the top sellers were and they invited them all to have a two or three minute interview and there are some good insights in there.

DAVID ALADDIN: Where do you see yourself in five years?

BERNIE THOMPSON: Well, you know, again, this all started with “I love devices”, it is actually I am not a seller, I am a device maker and a technologist so I hope that five years from now, we are still on the bleeding edge. You know, we have just had a transition in the USB space – the USBC – and it is a really exciting technology with a ton of birthing pains, you know, just a huge amount of kind of incompatibility issues and other technical issues right know. And so, you know, my focus has been for the last two years and probably will be for another year or two yet of getting all those technical issues ironed out. I mean, we are constantly working with TI and with Intel and all of these kind of big companies saying “hey, we are seeing these problems with customers and working on firmware and working on getting repros of hardware problems to them” and yeah.

We are deeply involved with all these stuff and five years from now, I hope we are doing the same thing, I hope we are, you know, a leading technology company on the cutting edge and that gives us an advantage because we are getting products to market which are better, sooner than our competition and so the customers who are buying Pluggable products are getting a better experience than if they are going to buy something that is months behind in the technology from somebody else.

DAVID ALADDIN: It is very interesting like someone leaves you a 1 star review, you guys go in and call Intel and you are like “this device is not working accordingly”. It is a lot different than most of Amazon sellers have to deal with, I mean, it could be just a design flaw but yours is actually something with another manufacturer tied into it.

BERNIE THOMPSON: Yeah, I mean so we get that one star review, our tools at www.efficientera.com will send us an email and say “hey, there is a one star review, here is what they said” and here is the Amazon order number that that goes with so that we can actually reach out and contact that customer. We send that right into our ticketing system and treat that as a customer service request like any other one and we start working on it, we go “sorry for your bad experience, I see from what you said and I think this might be what is going wrong, might be a hardware problem, let’s go ahead and send you a replacement unit or it might be some sort of problem pattern that we are seeing”.

Right now, there is a huge problem with the MacBook Pros triggering USB over current on any kind of power, charger or doc, you know, we will know “hey, you are falling into a problem pattern that is just a characteristic of the MacBook Pro, you know, so we will just get you a refund”. So yeah, we are really operating at a hopefully very knowledgeable kind of deep technical level and then that enables us to turn around, you know, much higher percentage of those one star reviews, you know, certainly than a seller who doesn’t know or maybe even worse – doesn’t care, you know, kind of about the technology.

DAVID ALADDIN: Yeah. Are you guys able to figure out every single review or is it kind of like a percentage of the reviews like who left that review?

BERNIE THOMPSON: We are able to … if they ordered from you, we are able to figure it out 100% of the time.

DAVID ALADDIN: Aw, that is awesome!

BERNIE THOMPSON: Yeah!

DAVID ALADDIN: Yeah because sometimes, you know, it says like “Amazon seller left this review” or “Amazon customer left this review” and you click on the profile, you can’t figure out who it is.

BERNIE THOMPSON: If it is an Amazon verified purchase and you are the only seller, we will figure that one out.

DAVID ALADDIN: Sweet! Alright, cool! I might have to check out that software.

BERNIE THOMPSON: Yeah, you have got to sign up. www.efficientera.com and we make it easy because these sorts of things, it is hard to believe it until you see it so we have a really long trial – we have a 60-day free trial.

DAVID ALADDIN: Very cool!

BERNIE THOMPSON: And the intent there is that, you know, because the tools do a lot of different things and we want to give you the time free to decide is this worth it or not. And we try to also make the pricing really work for small sellers in the hopes that our tools will help them grow into bigger sellers. So if you want to go beyond the 60-day free trial, it is just one cent per order and eight cents per aces per month so take your aces and multiply by 8 – that is how many cents and then take your orders. And so it is pretty easy to calculate the pricing so for all small sellers it works out to be a few bucks a month.

DAVID ALADDIN: Yeah. You guys have grown to 40-50 listings. Is it more than that?

BERNIE THOMPSON: Yeah, more than that. We have over a hundred listings.

DAVID ALADDIN: That is awesome! Very cool! Bernie, it has been great to have you on the show. Thanks for coming on. Is there a way for someone to contact you? What is the best way?

]]>Bernie built an 8-figure electronics business, wrote the book "Flywheels and Feedback Loops: A Guide to Success for Amazon Private-Label Sellers", and released the tools he used to automate the building of his own brand on Amazon.

In this episode, you'll learn:

* How Bernie grew his team
* When to add team members to your growing amazon business
* When to buy and puchase more inventory
* Critical decisions that led Bernie to where he is today
* Payroll, accounting
* Why he started his e-commerce company, and where he is taking it to
* Hiring decisions
* Inventory control and strategic advice
* Where he see's the e-commerce space going
* How he's up against massive corporations
* His customer support is killer

And much more!

DAVID ALADDIN: Great to have you on the show, Bernie!

BERNIE THOMPSON: Oh, thanks David! Glad to be on!

DAVID ALADDIN: Can you take us to the beginning before pluggable, before everything? Where did your journey begin?

BERNIE THOMPSON: Yeah, you know, actually, I have actually always been interested in technology, so, I got a computer science degree, worked at IBM in the 1990s, and worked at Microsoft in the 2000s, and started an electronics company in 2009 selling on Amazon. And that’s led to that being a pretty successful business and also we developed a lot of tools to make that business successful and now I’ve got a second business offering that tools to other Amazon sellers.

DAVID ALADDIN: So, why did you decide to leave IBM and Microsoft in the first place?

BERNIE THOMPSON: Yeah, yeah, you know, I think, you know, every job has its pros and cons. Actually, I love big companies. Big companies are cool. You know, you’ve got a big support structure around you. You know, at IBM I worked on OS2 which is an operating system that probably everybody’s forgotten about at this point. And at Microsoft I worked on tail end Windows NT and Windows 98, and worked on tail end Windows XP and Vista. So, you know, I was a cog in a pretty large machine, but I got…my stuff got seen by a lot of people. But I love small companies. Especially when small companies are successful there’s nothing that beats it in terms of good experience.

DAVID ALADDIN: So, in 2009 you decided to quit and you started a startup that just started launching products on Amazon, is that before FBA was launched? I believe so, right?

BERNIE THOMPSON: No, actually FBA had already kind of been opened up at that point. So, we were able to bet on FBA from day 1, which was a key part of it. You know, I really wanted to focus on the technology, on the customer support, and not have to think about the other things. You know, frankly I am terrible at sales marketing. And so, being able to, you know, kind of hand that off to Amazon and the significant part of the logistics which is something I had really no experience in physical goods. I am a software guy. So, being able to handle in most of that physical goods aspect to Amazon, you know, it was a big deal. I mean, it really enabled me to focus on what I was good at and that probably made the difference in terms of the business being successful.

DAVID ALADDIN: And when you left your job, did you just put everything behind you and you just moved forward with the startup, and how much…how much capital did you have when you started the startup?

BERNIE THOMPSON: Yeah, you know, electronics is a pretty brutal category. You know, if you are going to do anything interesting or you know, even kind of innovative a little bit, you need to have pretty high MOQs and the average price that you are paying is pretty high. So, yeah, I mean, you know,]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean53:30AS 83: The Battle for Dominance – Amazon vs Shopify vs FB – Interview w/ Jonathan Foltzhttps://amzsecrets.com/83-battle-dominance-amazon-vs-shopify-vs-fb-interview-w-jonathan-foltz/
Sat, 01 Apr 2017 01:26:21 +0000http://amzsecrets.com/?p=5802https://amzsecrets.com/83-battle-dominance-amazon-vs-shopify-vs-fb-interview-w-jonathan-foltz/#respondhttps://amzsecrets.com/83-battle-dominance-amazon-vs-shopify-vs-fb-interview-w-jonathan-foltz/feed/0Jonathan Foltz shared tons of golden nuggets. This is a definite listen for those who want to explode their business off the Amazon channel and diversify their business. He leverages the Facebook Advertising platform and pulls millions. I will probably be re-watching this a few times.
He is a digital entrepreneur that has started 16 companies and does not intend on stopping.
He has built a couple million dollar companies and his marketing agency, Digital Age Business, runs 4 separate Shopify stores of their own.
As a philosopher and futurist, he has been speaking around the country about the new Digital Revolution that is upon us and how we can take advantage of it.
In this episode, you'll learn:
How to create successful Facebook campaigns
Strategies that Jonathan leverages with Facebook Ads
The future of technology
Futurism & singularity discussion
Step by step Facebook strategies that work today
Testing Facebook campaigns and ad sets
How much money to spend when testing
What works better, video ads or image ads
And much more. Transcript coming soon.
Get in touch with Jonathan:
Digital Frontiersmen
DAVID ALADDIN: Great to have you on the show, Jon.
JONATHAN FOLTZ: What’s going on, brother. How are you? How’s everything?
DAVID ALADDIN: Good. Good. Take us to the beginning before things got crazy. Where did your journey begin?
JONATHAN FOLTZ: Well, my journey definitely has been pretty crazy. But I think it first started off when I was a kid, you know, like I think when I was like 14-15 years old that was when entrepreneurship started to come into play. I was lucky enough that I got my father to buy us a computer that had like a CD burner in it, and what I was doing back in that day, just like a lot of kids were I just happen to be one of the first ones to do it. We’re making CDs for other people.
We’re just like download stuff in the internet. At that time, obviously, it wasn’t the right thing to do but like, this was before everything started coming down. Kids didn’t know better. I was 14-15 years old, downloading music and then selling it to our friends for 5 – 10 bucks. Little CDs. And then I was selling baseball cards, basketball cards, and I had a little bit of success then. I had made one specific CD and I brought it to school, and I think this was around 9th grade or something like that, and I brought a boot bag full of CDs to the school and I literally sold out every single one.
Very next day every single kid in school was like going after something that I did, and it showed me like that was my first step of like, man, you know, entrepreneurship is bad a**. You know, like I don’t have to rely upon my parents now for money. I can do this on my own. So that started the whole entire journey that I was on. So, that’s just one thing and as soon as I got in high school, I graduated at Palmetto High School which is the same high school that actually Amazon, what’s his name, Jeff Bezos do. Believe it or not, there’s a lot, it’s crazy because it makes me feel good too about the trajectory because we’ve had actually some incredible technological entrepreneurs come out of Palmetto High School.
There have been a lot of them. So you know, that’s something like, man, that’s pretty amazing. Is it something in the water?
DAVID ALADDIN: What are they feeding you?
JONATHAN FOLTZ: What do they feed us, you know, like what the … is in those? There’s some nuclear water in the system or something, but yeah. Anyway, it’s just, it could also be coincidence at the end of the day, but right after high school I went to Deberi University which was very business and technology oriented which basically I am very much so right now. And I ended up quitting school, because I have a scholarship, I ended up quitting school just to go back into more entrepreneurship. I was running like a little pet shop and then a few little b...Jonathan Foltz shared tons of golden nuggets. This is a definite listen for those who want to explode their business off the Amazon channel and diversify their business. He leverages the Facebook Advertising platform and pulls millions. I will probably be re-watching this a few times.

He is a digital entrepreneur that has started 16 companies and does not intend on stopping.

He has built a couple million dollar companies and his marketing agency, Digital Age Business, runs 4 separate Shopify stores of their own.

As a philosopher and futurist, he has been speaking around the country about the new Digital Revolution that is upon us and how we can take advantage of it.

DAVID ALADDIN: Good. Good. Take us to the beginning before things got crazy. Where did your journey begin?

JONATHAN FOLTZ: Well, my journey definitely has been pretty crazy. But I think it first started off when I was a kid, you know, like I think when I was like 14-15 years old that was when entrepreneurship started to come into play. I was lucky enough that I got my father to buy us a computer that had like a CD burner in it, and what I was doing back in that day, just like a lot of kids were I just happen to be one of the first ones to do it. We’re making CDs for other people.

We’re just like download stuff in the internet. At that time, obviously, it wasn’t the right thing to do but like, this was before everything started coming down. Kids didn’t know better. I was 14-15 years old, downloading music and then selling it to our friends for 5 – 10 bucks. Little CDs. And then I was selling baseball cards, basketball cards, and I had a little bit of success then. I had made one specific CD and I brought it to school, and I think this was around 9th grade or something like that, and I brought a boot bag full of CDs to the school and I literally sold out every single one.

Very next day every single kid in school was like going after something that I did, and it showed me like that was my first step of like, man, you know, entrepreneurship is bad a**. You know, like I don’t have to rely upon my parents now for money. I can do this on my own. So that started the whole entire journey that I was on. So, that’s just one thing and as soon as I got in high school, I graduated at Palmetto High School which is the same high school that actually Amazon, what’s his name, Jeff Bezos do. Believe it or not, there’s a lot, it’s crazy because it makes me feel good too about the trajectory because we’ve had actually some incredible technological entrepreneurs come out of Palmetto High School.

There have been a lot of them. So you know, that’s something like, man, that’s pretty amazing. Is it something in the water?

DAVID ALADDIN: What are they feeding you?

JONATHAN FOLTZ: What do they feed us, you know, like what the … is in those? There’s some nuclear water in the system or something, but yeah. Anyway, it’s just, it could also be coincidence at the end of the day, but right after high school I went to Deberi University which was very business and technology oriented which basically I am very much so right now. And I ended up quitting school, because I have a scholarship, I ended up quitting school just to go back into more entrepreneurship. I was running like a little pet shop and then a few little businesses on the side, you know, right out of high school, I was already doing this with a partner that was much older than me. He saw the potential. While I was doing that actually… this is where I think it got a little bit interesting and this is what literally changed my whole, entire trajectory of my life. Believe it or not, I was also into some bad things, you know. I was definitely into one of the businesses that I had was actually growing of marijuana. Believe it or not.

DAVID ALADDIN: Oh, man. Interesting. Yeah.

JONATHAN FOLTZ: Yeah.

DAVID ALADDIN: Well, you never know. It’s not bad anymore, technically.

JONATHAN FOLTZ: Dude, I mean, now.

DAVID ALADDIN: Depend where you live.

JONATHAN FOLTZ: The leaf lies down here in Florida, right?

DAVID ALADDIN: Right.

JONATHAN FOLTZ: So, there are other places where you’re allowed to do that, but I actually got into trouble. My entrepreneurial journey actually took like a dark twist, because I was very much… though I want to help people I and I loved to be able to serve at the same time also got greedy. And that greed itself landed me basically in jail. Believe it or not, I was actually prisoned, and I was heading on a bad trajectory and once that happened it basically got me on my huge knowledge stint because right now, anybody that knows me I’m like the most hardcore knowledge seekers on the planet. I’ve read over a thousand books. I’ve attended some of the most high end classes that you can on human behavior, psychology, personal development. All that type of stuff. That’s something that fascinates me and I really want to find out the secrets of the universe and do something great for humanity. And if it wasn’t because of me landing myself in prison because you know growing marijuana like obviously what the hell was I thinking. At that time though, I was greed –based and bad influences around me, right? So I had some bad influences surrounding my businesses partner wasn’t the best person to take advice from though he was a genius businessman. That’s where I learned a lot of my business set of skills from him.

He was just taking us on the wrong trajectory and I went on for the ride and it ended me up a spot in the prison system. But, while I was in prison, this is one of the most interesting things; this is where I started to read like a madman. You know, like a madman, like I sometimes I’d read a book a day I was reading at least 2-3 books a week at least bare minimum, you know, shorter books. I can literally read the whole entire book in one day and you know, I get to meet the most fascinating people on the planet.

I was actually very good friends with, there is a governor of Florida. He was actually the longest running governor of Florida. I became almost like best friends with this guy for about a year. So his name is Childers. And he was also in the jail, prison system. He said he was set-up, I don’t know what the idea is, but he was a running senator for 32 years. He was the Dean of the Senate for 4 years and he was the President of the Senate for 2 years. So I was able to associate myself with incredible people that you probably would not have the chance to while you’re in the outside world, right?

Another man that was actually a big time lawyer that did some big IPOs. I also got to sit down and strategize and you know like they just wanted to have intellectual conversations while everyone else was having conversations about money, sex, drugs and stuff like that. Like you know we’re having awesome day as we communicate on how you move amongst the vultures and I happen to put myself in the right circle so I was able to learn some techniques and the mindset of you know these truly, truly successful individuals that are making big moves. So I think that was like my catapult, you know. That was my catapult. I was already entrepreneurial and because of this situation, it got me thinking even more and expanded my mind. Like I no longer saw the world for what it is and I really want to do something good because the last thing I want to do is end back up in jail again. You know, like that’s the last…

DAVID ALADDIN: I don’t know. It worked out for you the first time.

JONATHAN FOLTZ: Yeah, Sort of it like…

DAVID ALADDIN: I think the strategy is you got to drop high school like Bill Gates.

JONATHAN FOLTZ: You tell the kids right now like you guys…

DAVID ALADDIN: And then you got to go to jail and that sets you on the path. I think one of the biggest common things with me and you have this moment of quietness where you’re able to focus and sit down and read a lot of books. For me that was actually at work when I was just filing papers all day, every day. So I was listening to podcast every day.

JONATHAN FOLTZ: Oh.

DAVID ALADDIN: That set me on my journey.

JONATHAN FOLTZ: Yeah.

DAVID ALADDIN: But yours is actually jail, which allowed you to sit down and focus on entrepreneurship and the journey that you are about to take. That’s awesome.

JONATHAN FOLTZ: I think there’s a lot of value and there is a lot that comes from silence. You mentioned something really good and it happens. You go back in history you will find some of the greatest minds on the planet went through extreme adversity, near death experiences. But a lot of times what happens though, they were exiled who came back the ability that was exiled, and they have this time to sit, ponder, think and go within.

DAVID ALADDIN: Okay.

JONATHAN FOLTZ: And that is one of the missing components that are happening today in this technological world that is upon us because we’re bombarded by social media. We are bombarded by so many different people hitting us up, and the communication lines were so open that it’s hard for us to sit down and look at the bigger picture. We’re just so focused in the so called rat race that we can’t really think outside the box and what ended up happening let’s say for you in that situation that you’re just filing paper work and not having so much interaction in and out with individuals is that you’re able to focus and think, think about more about what’s happening in life. I guess definitely for me I was, I have some time on my hands, basically had me thinking about the bigger picture and obviously at the end of the day it’s like what is the purpose to life? You know, like was I here to go do stupid a*** and spend time in jail I mean no. That’s not, that’s not what I’m put here to do. So I got really go within and learn more about myself.

DAVID ALADDIN: What is the purpose of life in your opinion?

JONATHAN FOLTZ: Okay. This is actually a study that I teach and I’m, it’s literally one of the most important studies that most people don’t know. You’re going to hear me more in this industry talk about it. There’s not one other person that I know that talks about it, and it’s called Axiology. An Axiology is the study of values and purpose. And from one of my teachers, basically his name is, Dr. Demartini. Literally one of the greatest minds on the planet by far. He is considered a sage. A sage would be individual like Elon Musk, Bill Gates.

Dr. Demartini though he’s less known. These are individuals that can be remembered hundreds if not thousands of years from now. And what Dr. Demartini teaches is about the basically not the entrepreneurial journey, but like the ideological philosophy, philosophical journey that we’d go on in order to understand ourselves and it actually derives from the teachings of Aristotle. And Aristotle what he taught us is something called Telos, which is Teleology, which is the end of mind, which means the purpose. So what he did is he studied what made us have a purpose. And one of the things that happen today in society is that the majority of us have no idea what our purpose is.

I would say, you know, like at least 95% of the population, we don’t have any exact statistics on this, but I would say at least 95% of the population have no idea what they’re actually here for. If there’s any reason for us, some of us are just chasing after money. Some of us are just trying to make ends meet. Some of us just want to go and date as many girls as possible. You know, sometimes we have no idea what we’re here for. So on this study which teaches you about the value systems of humans, ourselves and others, it teaches you what you valued most and there’s a hierarchy between low and high and the top three values usually, usually you know dictate what your purpose is. So for me, just to give you an example, my purpose is, and its always changing slightly, is that I want to help humanity in a big way. You know it’s going to be through technology and education. So if you’ll ask one of the things like really big for me and then you’ll see my top three values which are business, knowledge and social change, you know, like trying to have social change and social influence and help people. Those three pretty much dictate a little bit of what my purpose is. So, let me ask you a question. Do you have any idea what your purpose is?

DAVID ALADDIN: I’ve, my purpose is actually trying to figure out my purpose. I have a slight idea of what it is, I feel like business is one of my main purposes, just to grow a very large business, employ a lot of people and to use that money to give back to people. And to use that money to launch inventions that I always wanted to create in this world. So, I’m, I feel like we’re talking a little bit earlier before the show started and I wanted to create businesses that I’d have the funding necessary to launch some of the stuff that are a little bit bolder.

JONATHAN FOLTZ: Yeah. I mean, it does take capital. Capital is an important thing. I think we’re both in the same line with that. What I’m doing now is facilitation for being able to come out to the world in a bigger way, have new technologies. There’s like, actually, believe it or not, I have some inventions of my own that I want to come out with, but a lot of funding and time just go into those. The more capital that you have it’ll a bit easier for sure. But what I think…

DAVID ALADDIN: I…

JONATHAN FOLTZ: Yeah. Go ahead.

DAVID ALADDIN: I think? We both grew up watching Dexter’s Laboratory and we’re like, just want to be like him.

JONATHAN FOLTZ: Dexter’s Laboratory. That was a good show actually.

DAVID ALADDIN: I know.

JONATHAN FOLTZ: And funny. So, I mean, what are the exercises that I definitely would tell you and tell anyone listening actually, there is, if you go to www.drdemartini.com, there’s a free test on the right hand side called, The Values Determination Process. That’s actually the best give, mind you, this is going to be one of the greatest minds, he is one of the greatest minds on the planet and he’s giving you this for free. The rest of his courses are very expensive. And what it does, there are 13 questions he asks you to determine your values. So now once you’ve determined your values system, and what you actually value, you know more about yourself because what, literally everything you do is based on your values system. If someone tries to get you to do something that is low on your value list, you’re not going to do it, and you’re going to procrastinate.

You’re going to, they’re going to think you’re an a** h*** But when they ask you to do something that’s highest in your priority list, the highest on your value list, you’re going to jump at the first take a lift. So let’s say that for you, if it’s about Amazon or if it’s about, hey let’s get this awesome person, let’s get Elon Musk on the radio show, you think you’ll even hesitate for one second?

So you’ll have him on your show? …, no! You’re going to jump at that right away because you value that very highly. What is behind it that you value, we don’t know exactly, you know, the business perspective. You never learn more information and shared messages to the world, but at the same time if someone asks you to, hey, let us go cook with one of our friends. Well I don’t know if you’re a cook or not. So what would you rather do? I, are you … kidding me? This is not even a question. I’m jumping to go talk to Elon Musk on the radio show, right away, and that’s dictated by advice, this one because of what you value.

So once we understand our value systems, and there’s another thing too that I do, this is very powerful, is hiring individuals. If you haven’t, take that test, okay. If they’ve actually taken the Values Determination Process, you can now see what they value most, so in order to get the things done you need, okay, you help them get what they want and what they value. And if you speak to them in their languages instead of injecting your values into them, for example, I like to travel. I have other people on my team that they don’t like to travel at all. So if I tell them, oh, men, cool guys we can be able to travel, if this launch goes well, they’re going to be like, okay, who cares? That’s what you like, I don’t like that. So I’m just, I’m speaking to, my values, but I’m injecting my values into them and that’s the worst I can do to them is going to possibly cause resentment. They’re not going to care.

But if, let’s stay, there’s family, they love family and that’s a high value for them. Hey guys, if this launch goes well you’re going to get a half vacation paid so you can spend time with your family, go up to Orlando, I mean, they’re going to be like, oh, man … So I’m speaking to them in their value system and that right there is so advantageous it’s not even funny. Just learning this set of skills that most people on the planet have an idea of what it’s about yet.

DAVID ALADDIN: How many employees do you have currently?

JONATHAN FOLTZ: Right now we have probably around 8 employees. We have about 8, about 8 full time people, about 9 of us and then what we do is sub-contract and then we have Freelancers, and we have people that help us with our shipping, shipping like in-house. So that tends to like go up and down and sometimes we’ll have more admins than other times just depending on what we’re scaling like one of our e-Commerce stores. So we have 8 full times.

DAVID ALADDIN: For everyone listening, Jonathan, you don’t sell on Amazon, correct? You sell completely on Shopify stores, right?

JONATHAN FOLTZ: I haven’t gone on Amazon, man. I haven’t…

DAVID ALADDIN: Exactly.

JONATHAN FOLTZ: Yeah.

DAVID ALADDIN: One of the biggest reasons why I wanted to hear his expertise and get him on the show, because he’s grown 4 different Shopify sites completely outside of Amazon and he’s scaled them up pretty big. So let’s go unto that. How did you scaled your Shopify stores?

JONATHAN FOLTZ: Well, just to get started, what’ll tell you is that my marketing agency, we have built probably over 500 websites for people including myself, I don’t know maybe like 4 or 5 of my own before I even got into Shopify. Believe it or not I only got into Shopify about a year ago. When I actually heard through, believe it or not, it was Tai Lopez, had a guest on…

DAVID ALADDIN: Oh, man.

JONATHAN FOLTZ: Yeah. Believe it or not, dude. Like, you know…

DAVID ALADDIN: He’s real?

JONATHAN FOLTZ: Yeah, swear, dude. It’s crazy. Because, crazy as it sounds, people might hate on Ty but you know he was actually one of the reasons that got me into this new model of business after people had been telling me, I had a friend of mine, that was, hey you’ve got to get into Shopify, stop doing client’s websites because I was doing a lot more clients stuff and he was telling me like you get on to Shopify, clients making $250,000.00 a month. I was like, dude, if they’re making so much money why aren’t you doing it? So, I didn’t believe him until I saw this webinar by Justin Senor on Tai Lopez’s page and I had done a business very similar previously with prenom demande And I love it because I was like holy …, I’m like I launched the business called, Herp Life, which my first e-Commerce store, believe it or not, in this Shopify e-Commerce niche in the sector. So what I did was I launched it about 3-4, like 4 years ago now and actually we went to a physical show and we sold out of everything but the prime issues so hard, you know, buy the shirts, then get them printed, make sure printing came out good.

Make sure we have all the sizes. I just didn’t like it. We did it so well. At that time I was building one of my other companies which were called, it was, it’s on The Reptile Niche and that ended being a multi, not a multi but a million dollar company. It was actually, at the time of the sale at the beginning of last year, we were evaluated at a million dollars so I ended selling that to one of my partners, his name is Ricardo Martins. He’s one of the partners that help me also built it up. I founded it got a couple of partners on board later down the road we took it to a million dollar company and ended up, one guy ended up leaving, the other partner, he ended up purchasing the company.

And then that’s when I kind of like when I sold that company, which was actually in the Reptile Niche, believe it or not, we have, we are an import-export and propagation company. So we’re literally dealing, and lots of e-Commerce and lots of social media. This before we even knew about Shopify. And I was like when I found out about this whole new model in Shopify, which is like, just like the beginning of last year, I opened my first website which was Herp Life, and this whole new model of business, although we’re marketers, so I have a marketing agency, we worked with giant companies all around the world Like Coca-Cola, Audi, Maserati. Our team has worked literally with some super amazing product, projects. One of my business partners actually out at Pakistan, he works on some incredible stuffs, too.

So like we have an awesome background but coming to Shopify, which was blowing away, though it’s very, it’s still in its infant stages in my opinion. I still think it’s worth a billion dollar company. I think its still in infant stages, because there’s not so many things that you can do on it and people are just coming up with these new apps that enable to do anything and that’s the reason why I kind of like Shopify better than Amazon model was that I’m about building brands.

And one of the things I believe in, you can tell me a little bit more because I am a little naïve to the whole Amazon thing, but one of the things that I do believe to be so is that with Shopify its more sustainable to build a brand. We have our customer retention, we can later market to them if we target these guys, and it’s more building brands. I feel like with Amazon, one of the reasons I didn’t go in that direction though it’s an amazing model because people were trying to buy.

There’s so many benefits, there’s an equal amount of benefits and drawbacks I believe. But at the same time the benefits that I saw since I come from a creative marketing agency is that we are building now a brand on a platform that is helping entrepreneurs. And also…

DAVID ALADDIN: Yeah. I agree. I’d much rather have a Shopify that pulls 7 figures than an Amazon store that pulls 7 figures. You have all the IP on your site you know.

JONATHAN FOLTZ: Is it true, too, I mean what I’ve heard, and I mean I guess this also on the supplement side you know discern things that you can be sound but Amazon could just pull you out, like they can pull you out.

DAVID ALADDIN: Yep.

JONATHAN FOLTZ: Is that true, or…

DAVID ALADDIN: It’s definitely true, you could definitely get, you can get taken out tomorrow, I don’t know. You might have that red notification that says you’re suspended tomorrow. But that’s why, you know, I, like everybody on the show believes that you need to be in ten, twenty different places at once. And so everyone that’s on them is also trying to expand into their own shop: into Wal-Mart, into jet.com. Not the Wal-Mart retail per se but Wal-Mart online Market Place. That’s what I’ve been doing, to a lot of people I’d been doing but I love how you mastered the art of getting your e-Commerce site driving all the traffic to that and you know you’re not getting that in the Amazon side. So let’s go more into that. How are you driving traffic? How are you building your e-Commerce stores up?

JONATHAN FOLTZ: Okay. So, in the past we’ve used SEO. I love Word of Mouth, obviously. Word of Mouth is one of my favorite. But now that we’ve been doing Shopify, the majority, which also can be little dangerous, it’s just that there are some gray opportunity. Like I haven’t even concentrated on other ways, just Facebook.

DAVID ALADDIN: Yeah.

JONATHAN FOLTZ: So I have been doing actually Facebook at probably about 7 years now. So I would definitely consider myself a Facebook Ads expert. It’s been about 7 year in the last year though, I would definitely say that I’ve gone into it so much deeper than I ever have before because its so, it could be so profitable to drag, direct traffic and have instant sales. I mean it’s almost like a science. And the more you learn about it, building this different type of audiences, building look like audiences, shipping throughout the world, figuring out where your cheapest traffic is going to come from, later retargeting them, creating VPAS… there’s a lot of like, there is so many different ways and strategies that we can use in order to bring fast traffic and instant traffic. That it almost in a way, it took me a little bit away from the whole brand creation. There’s a longer process where there’s like content creation, good social media, it’s almost because it’s so instant. You could literally just get it going.

DAVID ALADDIN: Like a drug.

JONATHAN FOLTZ: Yeah. Yeah. It is like a drug. I remember it was 3 feet from gold, the one that I did, and within 200 and 21,000, it was zero to $21,000 in about 3 weeks. And one of the things about that, that was all Facebook. Like I literally didn’t go into SEO yet, like it was working so well. I was just trading and that’s only because our supplier … up, man. I mean our supplier literally, I think if I’m not mistaken it was December the 4th, around that time our supplier did the paper work wrong and this is the time when , if you understand like getting things from China around Christmas Time is not these, like the times are slower, it’s more expensive. And also not only do we have this later ship times which everything was going to plan and he basically des the paperwork wrong and my stuff get stock in China. So now I have to find the stuff here in the United States and one of the things is, I already knew automatically, I was like, oh man, this is not going to be good. So I’m here finding the products in the US which I actually did find but the problem is they’re almost double the price. So all of a sudden, something that was super profitable, profit margin were like 40 – 50% or something like that literally dropped overnight between 5 – 15% which is super dangerous because if you have low margins like that any small mistake you’re going to go under. And if you’re scaling really hard I highly believe our biggest day which I think was December 4th was about $21,000. So the day, the couple of days before were like 17K.

I messed up, too. Like this is something I lost a lot of money because we were around 17K, I got greedy. I changed one of our product prices from and I’m sure you guys are all about this, too. I know you got this very well where that one little price discrepancy so I went and I took the price from $35 and I changed it to $39 and I scaled up, so I was looking to do by 25 – 30K the very next day and it literally, my conversion rate went from like 2.8% to like 1.8. And I’m talking about that’s like the third of your f*** sales just because that I want a little price difference and it kept me down to like $17,000.00.

So that was a huge mistake. I literally, just that one decision that I made probably lost me $7,000 – $8,000 in a single day. So I learned my lessons to be careful especially when you’re doing higher numbers on like you probably find out before then what that price fluctuation is going to be where people are going to, want to buy. So I already hit the sweet spot and I tried to be a little greedy because I’ve done it in the past where you can raise a little bit it doesn’t change the conversion rate that much.

DAVID ALADDIN: I don’t know if you’ve seen that. Okay. So can we go, let’s go more technical. So let’s say I have this product, what do you think works better, images or videos, for you?

JONATHAN FOLTZ: I mean dude, I’m just. Literally man, rarely do you see me post something that’s not a video.

DAVID ALADDIN: Interesting.

JONATHAN FOLTZ: Certainly it’s all video. I mean if you guys have seen like at the WA Conference in Facebook. Even Facebook tells you that the direction you’re going is all video. One of the things that they want to do and they’ve talked a lot on the subject is that they want to turn Facebook into pure video. You’ll see now when someone goes live it pops up on your feed, right? So like it pops up on your feed, the ones coming out first, getting way more impressions, first of all, when you’re doing video ads. So for me, most of the stuff I do, I literally have, I do videos ads. I was using an app called Quik, which literally I’ve done a lot of the video. Believe it or not, I have an agency. We have guys that do video. I have a video guy now but he’s local. I have a couple designers that help me do that. And even my business partner, he is a producer/director and I literally the ones that we made go most viral. No joke. There are homemade videos that I made and I’m not an expert at it. So that means anyone can do it themselves. Like one of the ones, I think one of the products we sold at least $100 – $120,000 and it was through a little, it was only, it was actually, believe it or not it was a test to find my audiences, okay. So I actually used the test ad that went viral and it just kept on going. I was like, … it. Let it just go.

DAVID ALADDIN: Let’s scale it up!

JONATHAN FOLTZ: And I scaled it.

DAVID ALADDIN: Yeah.

JONATHAN FOLTZ: We did very well, something that I was testing. So that goes to more of your questions to technical aspect is that what I like to do is obviously the video ads is the best way to go. Like depending also if you have a new pixel, old pixel. This store that we did that scale, we’ve already replicated that same process like a few times now, also. And it’s through some of these techniques that I’m going to tell you guys about right now and one of the things we did is that we obviously do a little bit of research on the target demographic that going for, right.

So depending on what target demographic, you knew. Like one of my companies is, we do Reptile stuff. This is not the one that we scale to look like that, but this is the very first shop that I had. To sell through Reptiles, what you want to do is find all those Reptile related niches. So you can go do the testing, so sometimes I like, if it’s something brand new that I’m going to or a new niche, you got to spend a little money to find out about your audience. You’re gaining data, so like a lot of people are like I lost $500 already, or I lost a thousand dollars. I always try to correct people. I’m like no; you have spent $500 – $1000 gaining data on your demographic. If you look at it as a loss your mentality is already thinking that you’re losing, in reality you have not.

So if you haven’t been paying attention to the numbers, that’s why you’ve lost. But if you’re paying attention to the numbers which I think is literally one of the key things that you could do when doing any Facebook Ad campaign is pay attention to your demographic, pay attention to your numbers. So what I like to do, let’s say I have that video ad go up and I’ll find out what pages are the most engaging. So what I’ll do is I’ll put it as target demographic, then I’ll start with PPEs, you know, Post Page Engagement because this will get more virility though it doesn’t mean that they’re going to be purchasers but at least it gets it in people engaging in it.

I like people get engage with my ads so people see that there’s people interacting because then they’re more willing to purchase or also interact to the ad, right? And simultaneously, I’ll do a website conversion ad to push for purchases even if it’s in the very beginning of a campaign. Like even if it is, okay. Facebook also knows information. They may not know your Pixel but they also know who are the purchasers out there.

DAVID ALADDIN: Interesting.

JONATHAN FOLTZ: So one of the things that you want to do, you run them simultaneously and what I’ll do is I’ll do, a lot of times I’ll start with a $5 ad sets, so I’ll do a campaign let say it’s a Reptile t-shirt or something like that. So it’s a Reptile t-shirt and what I’ll do right now is target let’s say, Reptiles intersected by Bob Clark reptiles, buy Savannah Monitors, by snakes, by, and these are all final ad sets. So I’ll do a whole bunch like and then what I’ll do is you know like…

DAVID ALADDIN: No, no. Yeah.

JONATHAN FOLTZ: Yeah. I’ll put a whole bunch in there so that I start to figure out who my demographic isn’t, who is it that I’m going to be targeting, at the same time I’m also gaining insights on who likes this actual ad, right? People will actually be clicking on to it. Some of those ads were not going to perform well after two or three days.

I’m usually going to shut them off and I’m going to let the performers run. If there’s any performers that are doing well and much gaining sales, then I’ll duplicate that ad, and then I would go ahead and take it into a brand new campaign. I’ll mention a number 2, I like to put the country code too, like in the campaigns so I’ll put WC Reptile Shirt dash USA and then dash Canada if it’s another one, dash United Kingdom, dash Australia, because you can sell all over the US. I like the big four: US, United Kingdom, Canada and Australia are my favorite. Some of my suppliers can also get supplies over there in a pretty good time. You have to be very careful shipping into countries that there’s going to be problems and such like South America, you can even have problems like getting there on time.

So what I will do is I’ll just see who’s performing who’s not. I’ll duplicate the winners. Let’s say I have a really big winner, and then I’ll create something like lifetime ads. So lifetimes instead of getting a daily budget, I’ll fight orders. What I’ll actually do is to start off at $350 for 14 days, which means that’s $25 a day and go after conversions if conversions are working obviously. Sometimes you’ll even have purchases coming out of post-paid engagements. So that’s pretty interesting. But at least now I’m finding out who is actually interacting with my ads. So okay for this niche or for this product, these are the people that are engaging. I’ve shut down all the once that weren’t working.

Now I concentrate and I start to look and gaining the data, you know you may want to write these down, put it into a excel sheet, you might just remember. I’m just one of those people like I’m so into my ads and everything like that. I kind of almost memorize a little bit like who’s winning, who’s not. Facebook will later recognize. They’re also; they’ll start to pop up in the first things once you’re finding your target demographic. I hope I’m not going too fast for you, brother.

DAVID ALADDIN: No. No. I’m just like deep in thought right now. I like it. I’ll just go back and overview it. So at first you do the research process. How many $5 ads happen at that point? Is it like tens or hundreds of $5 ads?

JONATHAN FOLTZ: Oh, I mean, you can do, I have done up to like 40 or something like that?

DAVID ALADDIN: Very cool.

JONATHAN FOLTZ: I think up to 40, sometimes even $10, depending if I really believe in the product or not. I think that has a lot to do with that too. So I’ll start out bigger if I believe that there’s something that’s going to be a winner, like the one that I did in December, I knew it was going to be a winner. And I was also doing like, at sometime I was doing panel canvass which those were extremely popular, those are still very popular right now. You just have to have a good supplier because most people who are getting them are getting them from China. And one of the problems is if you’re not, shipped them in e-package, and shipped them to the wrong country they take kind of long, so people have to remember that they are used to Amazon. So you know like what Amazon has done.

Freaking high standard and like even when I have it on my website, let’s say I am making e-packages from China, and such, one of the things that happens with that, I try to build up on fulfillment. Like I’m doing a lot of self-fulfillment here in the United States for various reason But when you’re doing that let’s say you can have it on your website that it ships in 5 – 10 days or arrives in a week to 2 weeks, or 2 – 3 weeks, people don’t read that. They’re, this is impulse traffic that we’re getting. We are getting very impulse. There is a very big difference. In Amazon, they are going to shop. That’s what you guys have as an advantage there because you are going there to shop and you’re literally going in there to find out information about a product that you want to buy. When you’re on Facebook, you’re not looking to buy. You know what I mean?

DAVID ALADDIN: Nope.

JONATHAN FOLTZ: Business being our main way of advertising. You’re not looking to buy so we have to grab your attention, take you away from what you’re doing, you know like end into a, hey you need to buy this.

DAVID ALADDIN: So, yeah. What’s the conversion rate on, you know your look like audience they click on your website, what’s the conversion look like when they go to your website?

JONATHAN FOLTZ: When you’re doing retargeting like someone has already visited your site and everything like that you can have a much higher conversion rate so that can be sometimes around 10-15%.

DAVID ALADDIN: That’s pretty good, yeah.

JONATHAN FOLTZ: At least in some of our cases. And then, I think what industry average is usually its around, I’ve heard some people like in the biggest companies in the world its under like 1% but like in the e-Commerce space you’d be hearing between 2 – 3%. Some people say a little bit less but between 2 – 3%. Lately we have been getting probably around like 5%. So I have been averaging around like 5% with some of my campaign. We’ve just been also, I’ve been very busy. A lot of stuff that I’m doing, I think that could go a little bit more if I stared retargeting a lot of people. With the conversion rates we’re going to get 5 to 5 out of a 100 people have visit our website to purchase a product. And that’s like usually 15% or something like that. So 33% of people that are adding to cart are actually purchasing.

DAVID ALADDIN: I’m not going to lie. I barely use, I’d, you know, I’ve experimented with this because, but when it comes to like retargeting, are you retargeting the people that have visit the website who have added to cart or did you like mixtures of that?

JONATHAN FOLTZ: You could do everything.

DAVID ALADDIN: That’s right.

JONATHAN FOLTZ: Hey, hey, hey. If you haven’t done that you are missing out.

DAVID ALADDIN: I know.

JONATHAN FOLTZ: Like you have no idea. So one of the things I see… and this is going to be an advantage. You’re probably going to start making money right away is use the Retarget App. There’s an app called Retarget.

DAVID ALADDIN: Yeah.

JONATHAN FOLTZ: And download that into Shopify store, come up with a cooler phase of getting people back into your thing and they do the rest of the work. All they do is they take 10% of your add expense which is nothing. Like it’s nothing because I’ve had some time 1 – 5, 1 – 6 returns on it. Right now I think I’m averaging about 1 – 4. So if I put in $10 I’m making 40 bucks.

DAVID ALADDIN: I see.

JONATHAN FOLTZ: And also like upper margins are pretty well. Like that’s pretty good. But I’ve had times where it’s like freaking insane, you know sometimes even 1 -10. So that’s one. Then there’s another one that’s actually very interesting. I had a couple of good campaigns with them. Lately there has been a little slower getting back to me and stuff like that. I just want to put that one small drop there. Pretty good company and they’re a big competition to retarget and it’s called Shoelace.

DAVID ALADDIN: I’ve actually used that one.

JONATHAN FOLTZ: Yeah, You’ve used them? Yes. So they have the journeys, and stuff like that which is pretty interesting is just like that some of the campaigns they do is more for brand recognition. Of which I like. I’m trying to build a brand, like my company is trying to build brands. I don’t want to have a fly by night…

DAVID ALADDIN: Exactly.

JONATHAN FOLTZ: Which I think is what a lot of people are doing. The problem is that right now, we have a big influx of retail companies going down and everything like that. But the promises also we have a lot of competition of entrepreneurs that are learning about this. So if you’re just doing the regular Joe website, no branding, little by little these consumers are getting smarter and they’re getting ripped off by people. While there’s a lot of people out there ripping people off. And one of the big issues with that and I’ll tell you right now, a lot of entrepreneurs have run into that and I’ve had a time with myself not ripping off, but we had late ship times. For example the companies that we’re working with write me up, just completely screwed us. They were Print On Demand Company and I was talking to the owner and one of the things that he was like, oh, we’re working on stuff, the ship times were late, and all of a sudden one day they shut down their company. And I got stuck like chuck right before Christmas time on one of my companies.

Actually, believe it or not, it was Herp Life, and I was so busy with these other company that I kind of slow the process so I had very slow ship times. I had to make a lot of refunds. You know people didn’t like it because guess what? They ordered a shirt for Christmas they’ve been waiting for two weeks then all of sudden I get a ping from them that they just shut down from one day to another. So there are a lot of people who are now getting ripped off by legitimate people that are trying to hurt them. Us, we’re obviously fund of their money we told them hey if you want to get a discount, we’ll hook you for that. We’re sending 3D [inaudible]. People have waited.

You know thank God a lot of people were willing to wait. Also that shows us that we had a good dedicated minor people that love what we’re doing. And they believe in us. But other people they won’t ship on those stuff for a long period of time. And you know, like people get mad, so the consumers are going to get smarter and smarter. So it’s like now you really have to actually build a brand because there’s going to be so many, new people coming in that are not learning how this works. And they don’t learn how this work, their business is done.

You know within a, you have a big scale. You have a hundred thousand dollar a month and … Cool, you’re not paying attention to the customer service, you’re not paying attention to fulfillment and then all of a sudden you’re getting shut down by Shopify, PayPal. There’s one subject that a lot of people don’t talk about enough it’s that with the amount of scaling you can do and the opportunity, there’s also the drawbacks, which is you know like if you’re not ready and you don’t know how to build business and you don’t know how the structure works you can be left in a situation where you’re out of money. And literally you went from a positive situation into negative 10 to one thousand dollars. And I’ve seen that happen.

DAVID ALADDIN: When you mentioned your video that you used, can you describe the video that was really effective just like you holding the product there. Is there in death? What’s going on?

JONATHAN FOLTZ: So, so… I’ll give you a little key what it is that I am doing. I’m not going to tell you exactly what it was but basically…

DAVID ALADDIN: Tell me exactly. No.

JONATHAN FOLTZ: You know, basically it was Shoes. Shoes are not the easiest to get into. We’re doing self-fulfillment too. So like one of the problems of shoes is…

DAVID ALADDIN: Shoes.

JONATHAN FOLTZ: When you’re actually doing shoes…

DAVID ALADDIN: They’re big!

JONATHAN FOLTZ: Have you ever noticed how like you can get shoes, you might be a, I’m a 10 but sometimes I’m a 9.5, sometimes I’m a 10.5, depending on what shoes it is. So a lot of people will get the shoes and in the wrong size. You’re going to deal with returns, and you know like it was a big mess at this point. And this one is so easy. I literally just filmed me trying the shoes on showing the shoe, not even my face but just in the bottom. And in the quick app you can just put the information like this is what the shoe is, this is the design, this is the name, and you can add all that stuff in there.

So basically what I did through the quick app right on my phone I created something extremely simple and I said its, and one of the things I said we need to be careful about this now, like I talked about a limited time offer so I’m not sure if like Facebook is holding us against that little bit more now like what’s happening right now, Facebook is definitely getting more in tune with like their ad policies and everything like that so we need to be careful you know that were not putting anything to too exciting or too much like, buy, you have to buy one right now, 75% off. In their guidelines I don’t even think you are allowed to have more than 50% discount so I try never to show that it’s more than 50% discount anymore. You going to like, be careful of what and watch out for.

DAVID ALADDIN: Yeah, so I saw like Shopify master’s doing like free product. All you have to do is pay shipping. I’m guessing, that’s not allowed on Facebook ads.

JONATHAN FOLTZ: Okay. So, I was just having this conversation with someone that has been talking to Facebook reps and supposedly a lawyer through Facebook. And supposedly that’s against the regulations now. So, I’m not confirmed that. But I stopped doing it. I did use free plus shipping in the very beginning, a lot of people using it. All the guys were teaching it. You know. I thought it was correct, but like now I just stopped. But, it was a very good technique and I’m not going to say, Ads surprise still trying and go through. But, you might get shut down because of that. You know. So, like, or your ad, so, I’m still waiting to confirm that.

So, I have heard about it in the grapevine but I haven’t seen anything on paper that shows it. So, for me, I can’t say yeah, you may. But, it was a good strategy back in the days to gain data not makes money. It’s not a good money making strategy. You know. So, lot of times like I was telling you want to gain the data to see who your buyers are? and I one of the things too, I love to ad, is that when your gaining that data you still hope that you’re still getting people to go to your website, right? So, do you still getting people go to your website let’s see your conversion rate is that 0.5 or 0.2 you know you know does the discrepancy in the ad between your product pages or price. And also there’s something going on there why you’re not converting high. But the reason we want to drive as much traffic anyways.

You know. Even if it’s a little bit lower converting it’s the critical look alike audiences. So, I’m literally and I talk about this, that I chase after look alike audiences because, once I do a look alike audiences you have a 2.1% for 1% and 4 million, 6 million, 8 million ,10 million yellow white spread products. I mean, you can scale tremendously and these are the people that best describe the users that are going on to your page. So, you know, like that data right there is crucial on referable to make those look like audiences. That’s where you start getting a lot of power.

DAVID ALADDIN: So, the look alike audience based on the people that just clicked on the ad and you can create that from just click, clicks?

JONATHAN FOLTZ: So. Yes, You. There’s many different ways to create a look like audiences but you make custom audiences and you make custom audiences through the people that visited your site.

DAVID ALADDIN: Very common.

JONATHAN FOLTZ: The people that have liked your page, people that have purchased on your page. You know, one of the things that I’d like to do on my made look like audiences, usually have to do with the people that I visited on a certain page. So, let’s say that I had a canned list that was sound very well particular one. I’ll make a look like, I make a custom audience based on the people that have visited that page itself. Then, take that custom audience and then create a USA 1, 2, and 3%. And so you break it up into three groups that are 2 million each.

DAVID ALADDIN: I got you. Yeah.

JONATHAN FOLTZ: Yeah, 2 million each and then you can do a Canada one. You know, and then you do a Canada one as long as you get into Canada. And you make a UK one, which comes out GE or GA or something. And then you have Australia. And then you have Australia. And then you do Australia, you know, 1 or 2%. Usually I do USA in 3%. Canada and UK and Australia make like 1% only and then a 1 and 2% possibly, if I believe in the product enough.

DAVID ALADDIN: And when he’s, by the way, when he says 1 or 2% that’s how narrow the audiences is.

JONATHAN FOLTZ: Oh, yeah. Let me…

DAVID ALADDIN: Because people will understand that.

JONATHAN FOLTZ: Yeah. Yeah. Okay. So when you do a look like audiences you have a 1%. Okay? So, it starts off with 1%. So, that means the 1% of people that look most like your audience out of the United States. Then, you can do a second one, which will be the, and that person is 2 million, so that’s 2 million out of the possible 200 million of users that are going off Facebook in the United States. You could create a 1 to 2% which is the second threshold, which is another 2.1 million individuals. Then, you could do a 2 to 3%. Which is that and you can make the sizes bigger if you want. I like to chomp them down until like 2 million bits though. Even from there, I’ll even break it down into at times, I’ll break it down into age groups within it so, like let say

I’ll do a 400, and let’s say I have a look like audience 1%. Then when I do a campaign, I’ll have the group 1 which is like 18-25, then 25. The Group 2 was 25-35, then 35-45 will be group 3 and then 45-65 will be group 4 and there around 500,000 each. So that way I’m actually like hitting multiple age groups at the same time and some of those will perform better than others. Yeah.

DAVID ALADDIN: Is there a way to quickly create the forty campaigns? Or are you going through each screen one by one?

JONATHAN FOLTZ: Honestly, I mean, I think there’s like a couple of apps out there that do it, but I honestly I do it on my own. Oh. Okay. You know, there is a way to do it a little bit faster because if you were doing your ads manager takes longer, so the way to do it is through the power editor.

DAVID ALADDIN: Gotcha. Yeah.

JONATHAN FOLTZ: So you’re going to the power editor. You click into your campaign, it takes you into, you know, let say you just had one add app and it’s add set, you click on it. You press duplicate and then let’s say you do put there 4 or 5 of them. And then you have the 4, 5 and 11 but then you going to go and edit each one. And once you’re done then you could go ahead and press the little green button at the top right and then you’re all go ahead and like update every single one simultaneously.

DAVID ALADDIN: Where did you guys go? We’ve got Facebook Ad to master now. No. Did, the information you’re providing is invaluable and it’s allowed me to figure out a lot of the things that were very foggy. Especially, like the custom audiences. I was always just doing custom audiences based on email addresses that I have been collecting. But you’ve opened my eyes up in. Go ahead.

JONATHAN FOLTZ: Dude. You can even do a decent new one that I love using. Actually, you can even do a custom audience based on a video that people watched to 95%. You can make it look like…

DAVID ALADDIN: Wow. Yeah.

JONATHAN FOLTZ: Based on that which is…

DAVID ALADDIN: Yeah.

JONATHAN FOLTZ: That’s been converted pretty well for me now to.

DAVID ALADDIN: Let’s step outside of Facebook Ads. The technology of Facebook itself is just, it seems they have an unprecedented parallel, I mean, advantage in terms of how targeting there, you know, you can target people nowadays. What are your thoughts on that?

JONATHAN FOLTZ: It’s pretty crazy. I mean one of the things that I’ve told clients in the past and like what I tell now like I coach and counsel with individuals. What I tell them now is like, right now what are the main things you want to look at because the traffic is so cheap. Is Facebook ads, because there was never been in the history of mankind something that knows you probably, better than you know yourself. So, depending on the information that people are putting on which people are putting on everything. I also highly believe and this is the technology that Google handed far like 3 or 4 years ago where they have speech recognition marketing.

So, what I believe now, after having conversations with friends, we’ve just literally talking like I think I was at the Marketers mansion, I’m in Phoenix the other day and we were talking about, I forgot what it was, like Cambodia or something. I forgot what I was that we are talking about. This happens to us in several occasions. I’m just the last ones that, one of us goes on our phone, one of the first ads that pops up was the conversation we just had and he had not put anything into Facebook, Google anything at all. We’ve just having the conversation. And this continues to happen to me and others. So it’s like they’re getting information in many different ways that we do not know about.

I mean and they’re buying this information, too. So, they purchase. People don’t understand that Facebook purchases a lot of this. So, it’s not only people think it’s, oh, it’s just the information that we’re putting in Facebook and everything. No. It goes much further than that. They’re buying this information. Your text messages, possibly voice recording messages and everything like that and your conversation, you are having in Facebook. Literally, on Facebook itself are being recorded and their being translated into things that you’re talking about, so, they could target you.

So, like people don’t understand this technology is extremely advance. The most advance on the planet and right now it’s still theoretically cheap, you know, until, the biggest companies in the world are realizing it now. You know, they are realizing it so, we have a very short whip pen window of opportunity to get this really cheap traffic until it becomes kind of like Google was back in the days. You know, Google was an amazing way to get out to the customers. Now it’s a little bit harder. Though a lot of those people are now entering into the Facebook space. So, I think that there is also going to be a shift back into like Google searches a little bit. I believe.

DAVID ALADDIN: This podcast has been super crazy. It’s taking me out of the Amazon space. Even if it was just a freaking hour. I’m telling you, like and most of my audiences completely into this scene and were always pushing the envelope into figuring out how to expand our businesses in multi directions, because, we all understand Amazon can kick us out in one day or the next day or a week from now. Who knows?

JONATHAN FOLTZ: And the key is you’re not even building the sustainable brand. I mean, I’m big on building sustainable brand and the problem is like, where did you guys get emails from your customers? Where you could set up an email? And after that, you see like every customer is worth, you know, people also dispute this but some people say depending on your business model, each customer is worth a dollar. You know what I am saying. A month.

DAVID ALADDIN: Yeah.

JONATHAN FOLTZ: So, you have let’s say a 10,000 email list. That’s $10,000.00 you can make if you’re doing a really good campaign.

DAVID ALADDIN: Good. Yeah.

JONATHAN FOLTZ: A brand new product just came out. Say thank you. Hey, guys, thank you. And while you do sometimes, hey, thank you very much. I appreciate everything that you’ve done for us and supporting us. Here’s a 20% off coupon, because you guys were awesome. Enjoy. Then all of a sudden that day, you know, an extra thousand bucks. I mean just by sending out an email. You know, like very easily. So, to me it’s like, it has its advantages and that’s why I’ve gone full pledged into it. And that’s what helped me out like very much get into this specific niche and I’m enjoying and going full blast in it as we speak.

DAVID ALADDIN: Yeah. All right. We got about 5 minutes left. Let’s talk about digital frontiers and then what is that?

JONATHAN FOLTZ: All right. So digital frontiers, man, I just announced it a few days ago actually while I was out in Phoenix, and it’s a new brand that, as you guys know I have created multiple amounts of companies. You know I have now Digital Age Business which is our marketing agency which is open on 2009 as a BBA. And you know we build it throughout the years more so now on the last 4, 5 years. Were not one of those brand new agencies that came out like we’ve been doing this for awhile? And digital frontiers was an idea that sparked from – so really this were and I might go a little far off but guys this is like literally some of the most incredible things that are happening on the planet right now. So the guy that I follow named, Ray Kurzweil, and Ray Kurzweil, is literally, probably the frontiers man of the world when it comes to futures. Okay. So like I’m a futurist I know Rey is one and he talks about a concept called the Singularity. Are you familiar with the Singularity?

DAVID ALADDIN: For those that dawn was saying, it was the Singularity.

JONATHAN FOLTZ: Yeah, for the Singularity, and it’s going to happen. It’s going, unless we have a meteor hit the planet. No longer sci-fi, guys. This is like real stuff, you know. At first I thought it was fake, when I first heard about it, but the Singularity event is when human consciousness integrates and synchronizes with technology. And as people don’t even know like technology is going so fast it’s not even funny. I was just hearing something right now that our cell phones in the year 2020 to 2021, the technology we have here is going to be a technology that is much faster on a little single chip. Okay. And this is, this is right around the corner, guys. So on a little single chip we’re going to have better way faster technology than we have on our cell phones right now. So that right there is like something to show you like imagine 2029 like you’re saying, 2045, so when this happens life on the planet literally is so much different because what Ray predicts and some of these other futurist now, is that we will become one billion times smarter.

DAVID ALADDIN: Wow.

JONATHAN FOLTZ: So think about that for one second, okay. If we become one billion times smarter can you even imagine what life will be like on the planet where robots already are like super advanced artificial intelligence already exists? This right here will be, you’ll have technologies ten thousand times faster, that will be on little nano box that can fly everywhere, anybody wherever it is, okay. This is real stuff guys. I was so amazed, I was so baffled that it’s, that some even think about this. Then I learned that he also believes that he’s going to live forever. And like what the …, like this guys is nuts.

DAVID ALADDIN: Yeah. To further that concept, my opinion of the Singularity is actually, computers and AI, it’s when they start creating inventions faster than humans can. It happens so fast that none of us can comprehend that the mode of innovations that are going on at a particular time anymore. And so they kind of like surpass the human ability to do it rather than merge with the, but I’ve heard the other side too were humans and AI are merging together. That’s inevitable, too. I think.

JONATHAN FOLTZ: This where, it’s called the transhumanism, where we’re going to be able to merge together with technology in order to keep up. That’s why I was talking to you before this call about Elon Musk and his neurolink, where he’s already working on the technology right now to merge the human mind and the brain with technology and computers. That’s already happening, so it’s inevitable.

DAVID ALADDIN: Feel like we could do an entire episode on futurism. It’s kind of fun, too.

JONATHAN FOLTZ: Dude, yes. So, I’ll do it quick, coz I know there’s not a lot of time, but.

DAVID ALADDIN: Go ahead. Yeah.

JONATHAN FOLTZ: So, Ray Kurzweil, he starts talking about this stuff, from my men, this guy’s nuts, but I really go into it. I really like, I like it. In a way it was kind of like storytelling, but it’s like, there’s no way it’s real. And I start to find out that this guys freaking on point. He’s one of the greatest inventors. He is actually considered the Thomas Edison of today. He also was hired by Google as their chief architect, and he is running now their artificial intelligence programs and their launch every program. So I was a little… I was wait a second, I’m like this guy knows what the … he’s talking about. So he has a cool concept and this is where, this is kind of like what shifted my whole entire trajectory of what I want to do in the world is that he has something called the lab accelerating returns. And the lab accelerating returns, what it states is that we are now, our paradigm shifts on the planet are doubling in speed every time they reach a new level.

So back in the days of paradigm shift was one we learn how to make fire, you know depending on everyone’s religious beliefs, that could be different but, you know, what we learn how to stock. When we learned how to, one of the notions of like putting hieroglyphs on the walls, so other people can get information. When the printing, a few hundred years ago the printing press. Mass information can now go out to different distribution of, and distributed all over the world. So we’re dancing faster, okay. You know as of late, it was when computers and internet came about. Okay. That was a paradigm shift. Oh my, god.

Now we have internet, we’re connected around the world and next one was social media. Okay. So what’s the difference though, that used to be millions of years apart thousands of years ago there thousands of years apart, a few hundred years ago, they’re hundreds of years apart. We are now, some people, they have different timelines on this but I’m going to go by Ray’s, for he’s the leading futurist in my opinion, right now and were on the ten year cycle. So were about to hit the five years cycle.

So what happens next? There’s a two and a half year cycle, one in the quarter, six month, three month, one and a half, now were under a year. So we’re actually just having a conversation to, where we’re talking about like, man, every single day there’s a new technology that’s blowing us away.

DAVID ALADDIN: There are ten we haven’t heard about, you know it’s.

JONATHAN FOLTZ: There are ten you haven’t even heard about.

DAVID ALADDIN: It’s crazy.

JONATHAN FOLTZ: What happens in 10 years? They’re going to be happening every hour, every hour, every minute there going to be something that blows your mind away, is going to be happening. So the reason that we started Digital Frontiers now is because we see this evolution and this, and in my whole model behind Digital Frontiers means digital revolution because there’s a revolution here. You know like this is an actual revolution that’s happening on planet and the problem is, just like you said, a lot of people are going to be left behind and they did not even know that a lot of these things are happening so we want to create a community of education, philosophy, futurism because we’re going to definitely get into a lot of things that are happening in the future and we’re going to help entrepreneur be ready for this new shift and this new epoch that as Rey would call it, that is a punch.

DAVID ALADDIN: Is it possible to be ready though, like what if it’s too fast for us to be, to comprehend you know to…

JONATHAN FOLTZ: Which some of us won’t?

DAVID ALADDIN: Yeah. I feel like what we begin to understand, it’s already going to surpass us, and that’s going to more stuff coming out that we’ve, now we’re out dated in the suns, you know.

JONATHAN FOLTZ: In a way like were, were going to have to merge with technology. I mean that’s, that’s why I think the Singularly event has to happen, where or artificial intelligence is going to, robotics, because I think there’s three stages of the fifth, of the fifth epoch, because that’s what we’re entering right now, it’s called the fifth epoch and it’s genetics, nano technology and robotics, GNR it’s called GNR. So genetics are going to be completely changed around this. We’re going to have, we’re going to be able to glitter in it’s your 2025 to 2029 were going to be able to reverse medical illnesses and all that…

DAVID ALADDIN: I just saw, I just saw, is how like, won’t people talk about connecting the neuro link. How we’re going to tap into that where we understand what’s in the other data base faster than what we can perceive, you know, currently as our brains you know like, when you see something, when you read something, your understanding has earned speed but you know computers can have an unlimited mono speed that which it can received data and information and hopefully analyze it and understand what it means. How does that integrate into our brain you know, I find that part the most trickiest part…

JONATHAN FOLTZ: Exactly. What’s happening, I mean already like you know the quantum computer and one of the problems with the brain itself is that we don’t have the stamina on this extremely, extremely smart and it definitely, it adapts rather quickly than not quick enough were technology and mechanics and stuff can and electricity in stuff that we just cannot view. So what’s happening is that we’re going to have to merge in their brains actual chips.

DAVID ALADDIN: What are you guys talking about right now?

JONATHAN FOLTZ: I mean that’s the thing though, I mean that sounded so outlandish back in the days, but this is the world that were entering. So the people that want to be ignorant to the subject, you are the ones who’re going to be left behind. So you know, like media. I, I still look at this stuff as sci-fi. Now, after doing the proper research and listening to the smartest minds on the planet. Okay. Smartest mind on the planet, the futurists that are making the moves, the ones that are consulting with the largest companies in the world are now all about it. I mean, I’ll give you a good perspective, okay. This is going to be a great perspective for everyone and I’m going to ask you a question. And there’s a question for everybody. If you had to guest Elon Musk, okay, so out of the three companies, the major companies that everyone knows about. Okay. We have Tesla, we have Spacex, and then we have Solar City, right? So those are the three major companies that you know about that he has, right. Out of those three companies where do you think he spends the majority of his time?

DAVID ALADDIN: I’m waiting for the audience to have their answer. Oh, let me think…

JONATHAN FOLTZ: Everyone guess really quickly.

DAVID ALADDIN: I’m going to say, Tesla.

JONATHAN FOLTZ: Okay. Tesla. All right. That actually, it was a little bit of a trick question. Okay. Because actually people know that’s the majority to population that’s what we know. Believe it or not and right now I know he is working on the neuro link, so that could have changed. But as of just about a month and change ago he was asked and who’s like he’s talking about how he spends 80% of his time now working on something called Open AI. And it’s a company that is trying to come about with artificial intelligence and bring it to the masses. Because he believes that those are desperate need on the world right in the world right now. Okay.

So every time I want the greatest minds on the planet his spending 80% of his time. Okay. That means that he has only six and a half percent of his time to be able to go into the other things and even less so because he has a family right. So he is spending 80% of his waking hours working on artificial intelligence because he believes that there’s such a necessity. It’s also a non-profit organization but it work like a start-up, he says because they are so eager and they know that this is something that the humanity needs so much. So that shows in just a little take of like how close we are for these things to actually start happening. You know like…

DAVID ALADDIN: I’ve heard that he sleeps on the Tesla mini manufacturing line. So I would say it’s about 7 hour’s right there where he spends a lot of his time, so.

JONATHAN FOLTZ: He is like, like I was right there often because he sleeps. Every single…

DAVID ALADDIN: But I’ve heard about Open AI project. The guy got his hands in too many things. I don’t know how he does it. You know, it’s incredible what he’s created. In such a short, it feels like it’s a short time. It’s only been like, maybe 15 years at most and he’s created these 3 major companies and don’t forget about PayPal.

JONATHAN FOLTZ: PayPal? The world forever man. You know.

DAVID ALADDIN: Yeah.

JONATHAN FOLTZ: It’s… just to create all this. Imagine he had never sold it. People said that was the stupidest mistake he ever made in his life. I mean, but look at what he’s done with it. Sometimes, there are greater opportunities on the horizon. Like for me, I sold a very profitable, my import- export and Propagation Company. That was, I, we’re really looking’ to this really, really big numbers just this year and the next year, and I ended up selling it for less than [inaudible] And I missed out on a few job opportunity because I see what’s happening right now with technology, the e-Commerce side, the internet marketing. And I don’t want to missed out like I really did not want missed out on it so I left something in order to go after something I believe there’s much more value and I can literally help change the world. You know.

DAVID ALADDIN: What we’re doing today is most likely what were not going to be doing in ten years from now, you know, it’s not crazy like.

JONATHAN FOLTZ: Dude.

DAVID ALADDIN: Where’re we going to be?

JONATHAN FOLTZ: Trajectory. And with technology now? I mean, man. Things are moving so much faster. Information comes in so much faster at lightning speeds, you know. We’re not even seeing like, this is the part I missed to put into that whole thing we’re talking about, you know. Love is celebrating returns. Right now, everyone has the vision of us going in a linear road. Linear model. So it’s literally just you know maybe going up a little bit and everything like that. The problem is, it actually grows exponentially. So we’re actually entering into the hockey stick stage of the elevation. And what you’re going to see a little bit of more does so reentering right around here and this is what’s about to start happening. We’re growing exponentially, with the speed of how technology’s going to grow, so.

DAVID ALADDIN: He’s pointing to the sky, for those who are not listening?

JONATHAN FOLTZ: Yeah. Like, yeah. If you guys can’t see what I’m doing, I’m showing the hockey sticks, so right at the level of the hockey sticks start really start accelerating up so fast that most people, like I said are not going to be able to able to drop. And that’s why digital frontiers men were there. And just to go a little bit more into DFM which is our initials. This has a couple of things that we’re going to be doing to help entrepreneur. I mean we’re also now that you are asking about Shopify and everything like that we’re actually going to be selling a course on building a sustainable brand which is what we’ve been doing forever that’s what I do in the bigger circle in the million dollar company.

And then, what I’m going to do, is like teach people the different intricacies of Shopify and Facebook Ads scaling, in order to have a successful model. And I’m literally taking people into my business to actually look at what we do. You know, I mean, like how is it that I did it, and how is it that you can do it, and I’m making a guideline that you can just follow through. It’s really going to be very different because it’s going to be a lot about branding, there’s a lot of mindset, I’ll talk about the philosophy behind these things, so lot of time people like the technical side only, so not only did I do the technical side but I’m adding so much value on a high level to bring forth high level entrepreneurs on the planet.

So you know, that’s something that I think is going to be very different than what people what re doing in the industries right now. And my whole thing is like I just want to help people as much as possible make entrepreneurs very successful so that they can go out into the world and create awesome things.

]]>Jonathan Foltz shared tons of golden nuggets. This is a definite listen for those who want to explode their business off the Amazon channel and diversify their business. He leverages the Facebook Advertising platform and pulls millions.
He is a digital entrepreneur that has started 16 companies and does not intend on stopping.

He has built a couple million dollar companies and his marketing agency, Digital Age Business, runs 4 separate Shopify stores of their own.

As a philosopher and futurist, he has been speaking around the country about the new Digital Revolution that is upon us and how we can take advantage of it.

DAVID ALADDIN: Good. Good. Take us to the beginning before things got crazy. Where did your journey begin?

JONATHAN FOLTZ: Well, my journey definitely has been pretty crazy. But I think it first started off when I was a kid, you know, like I think when I was like 14-15 years old that was when entrepreneurship started to come into play. I was lucky enough that I got my father to buy us a computer that had like a CD burner in it, and what I was doing back in that day, just like a lot of kids were I just happen to be one of the first ones to do it. We’re making CDs for other people.

We’re just like download stuff in the internet. At that time, obviously, it wasn’t the right thing to do but like, this was before everything started coming down. Kids didn’t know better. I was 14-15 years old, downloading music and then selling it to our friends for 5 – 10 bucks. Little CDs. And then I was selling baseball cards, basketball cards, and I had a little bit of success then. I had made one specific CD and I brought it to school, and I think this was around 9th grade or something like that, and I brought a boot bag full of CDs to the school and I literally sold out every single one.

Very next day every single kid in school was like going after something that I did, and it showed me like that was my first step of like, man, you know, entrepreneurship is bad a**. You know, like I don’t have to rely upon my parents now for money. I can do this on my own. So that started the whole entire journey that I was on. So, that’s just one thing and as soon as I got in high school, I graduated at Palmetto High School which is the same high school that actually Amazon, what’s his name, Jeff Bezos do. Believe it or not, there’s a lot, it’s crazy because it makes me feel good too about the trajectory because we’ve had actually some incredible technological entrepreneurs come out of Palmetto High School.

There have been a lot of them. So you know, that’s something like, man, that’s pretty amazing. Is it something in the water?

DAVID ALADDIN: What are they feeding you?

JONATHAN FOLTZ: What do they feed us, you know, like what the … is in those? There’s some nuclear water in the system or something, but yeah. Anyway, it’s just, it could also be coincidence at the end of the day,]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean1:07:26AS 82: Selling Your Amazon FBA Business for Millions with MindBayhttps://amzsecrets.com/82-selling-amazon-fba-business-millions-mindbay/
Tue, 28 Mar 2017 01:03:21 +0000http://amzsecrets.com/?p=5779https://amzsecrets.com/82-selling-amazon-fba-business-millions-mindbay/#respondhttps://amzsecrets.com/82-selling-amazon-fba-business-millions-mindbay/feed/0Today I’ve got two invincible kings on the show – Wilson who is the founder of Mindbay, a specialized Amazon brokerage firm who has handled over 50 transactions in the last 3 years. Wilson has been an online entrepreneur for over 20 years and has operated an Amazon shop himself.
Hameed Hemmat, also a partner in Mindbay, has a background in App development specifically with iOS apps. He sold his app business recently that he was running for 5 years. He also operates a successful eComm store in the indoor grow space.
In this episode, you'll learn:
How to sell your Amazon FBA Business
How Mindbay sells Amazon and App businesses
When to sell your Amazon FBA Business
Why to sell your Amazon business
Best practices for selling your Amazon Business
Getting acquired
What you need to do before getting acquired
A very detailed step by step process that is involved
And much more!
Mindbay Exclusive - Free quote on your Amazon FBA Business
http://amzsecrets.com/82
DAVID ALADDIN: Great to have you on the show, guys!
HAMEED HEMMAT: Thank you for having us!
WILSON: Thank you! Nice to meet you, Dave!
DAVID ALADDIN: By the way, this is the first episode where we’ve had two guests on the show at the same time. Can you guys take us to the beginning before Mind Bay? Where did your journey begin?
WILSON: Hameed, I’ll let you start there.
HAMEED: Yeah, let’s see… Well, I started in the app business… I am going to get to how me and Wilson met… But I started in the app business about five years ago. This was during I guess you can call the gold rush of the risk-in era where anyone who’s somewhat familiar with app development started in 2011/2012. Me and a friend of mine, we partnered up, we built about seven portfolios, meaning seven developer portfolios with over 400apps. Just recently… The way I met Wilson actually was through a brokerage because I was looking to sell my business over the past year. And Wilson ended up buying my business, so…which ended working out great, and then we became really good friends. And then we saw, you know, I guess you can say a gap in the marketplace with brokerages. And no disrespect to the brokerages, I worked with these guys, they are great. But we just saw that we could offer a better service and help other business being able exit their businesses. So, we decided to partner up, plus we became good friends and that’s kind of how we got to where we are at today.
DAVID ALADDIN: What about you, Wilson?
WILSON: Okay, so yeah, my background…well, my educational background is in engineering, so I have a system based background. But my career really started to focus on entrepreneurship and so I’ve been involved in probably over fifty different businesses at different level ranging from the CEO of one billion dollar plus firm to a total startup. So, I’ve done a lot of different things. Really my strengths are really systems based implementation, so, picking a business and scaling it, specifically in the sectors of ecommerce, Software and also marketplaces. So this is kind of where I’ve dedicated my focus. Mind-Bay was founded because I realized at one point that in order to sort of find business opportunities. Building it was why I started it, but it was hard to do because I guess setup of any business takes time. So, I just decided that the best way to approach being a serial entrepreneur is to acquire the business. And what I did was I created Mind-Bay primarily as an acquisition for acquisition. Through that process of working with sellers like Hameed I built relationship with them, because a lot of them are very talented. You know, people who are willing to build a business from scratch usually have a certain, you know, profile which includes, you know, highly motivated personality, also willing to take risk, a lot of different skills. So, I tried to work with those people if they are right and really tried to...Today I’ve got two invincible kings on the show – Wilson who is the founder of Mindbay, a specialized Amazon brokerage firm who has handled over 50 transactions in the last 3 years. Wilson has been an online entrepreneur for over 20 years and has operated an Amazon shop himself.

Hameed Hemmat, also a partner in Mindbay, has a background in App development specifically with iOS apps. He sold his app business recently that he was running for 5 years. He also operates a successful eComm store in the indoor grow space.

DAVID ALADDIN: By the way, this is the first episode where we’ve had two guests on the show at the same time. Can you guys take us to the beginning before Mind Bay? Where did your journey begin?

WILSON: Hameed, I’ll let you start there.

HAMEED: Yeah, let’s see… Well, I started in the app business… I am going to get to how me and Wilson met… But I started in the app business about five years ago. This was during I guess you can call the gold rush of the risk-in era where anyone who’s somewhat familiar with app development started in 2011/2012. Me and a friend of mine, we partnered up, we built about seven portfolios, meaning seven developer portfolios with over 400apps. Just recently… The way I met Wilson actually was through a brokerage because I was looking to sell my business over the past year. And Wilson ended up buying my business, so…which ended working out great, and then we became really good friends. And then we saw, you know, I guess you can say a gap in the marketplace with brokerages. And no disrespect to the brokerages, I worked with these guys, they are great. But we just saw that we could offer a better service and help other business being able exit their businesses. So, we decided to partner up, plus we became good friends and that’s kind of how we got to where we are at today.

DAVID ALADDIN: What about you, Wilson?

WILSON: Okay, so yeah, my background…well, my educational background is in engineering, so I have a system based background. But my career really started to focus on entrepreneurship and so I’ve been involved in probably over fifty different businesses at different level ranging from the CEO of one billion dollar plus firm to a total startup. So, I’ve done a lot of different things. Really my strengths are really systems based implementation, so, picking a business and scaling it, specifically in the sectors of ecommerce, Software and also marketplaces. So this is kind of where I’ve dedicated my focus. Mind-Bay was founded because I realized at one point that in order to sort of find business opportunities. Building it was why I started it, but it was hard to do because I guess setup of any business takes time. So, I just decided that the best way to approach being a serial entrepreneur is to acquire the business. And what I did was I created Mind-Bay primarily as an acquisition for acquisition. Through that process of working with sellers like Hameed I built relationship with them, because a lot of them are very talented. You know, people who are willing to build a business from scratch usually have a certain, you know, profile which includes, you know, highly motivated personality, also willing to take risk, a lot of different skills. So, I tried to work with those people if they are right and really tried to build upon that. A lot of the people I work with are also entrepreneurs and a lot of them happen to be in ecommerce such as Amazon and eBay, and they always ask me to go and sell their business. So, that’s how the sell side part of our business kind of formed, but most of it was really based upon the bayside. So, that’s kind of the background and now here we are. I am still, you know, focused on being, you know, very entrepreneurial. We also operate. But the brokerage now has really come to intuition because I found Hameed. You know, it was very difficult to find a partner who not only had sales background and the ability to track and work with people, but also the experience to actually doing an Amazon business, and other businesses as well. So, I think that’s a very important aspect of being a successful broker.

DAVID ALADDIN: And Hameed, you said you had four hundred apps before you got acquired. How did that happen within five years?

HAMEED HEMMAT: Oh, man, you know, there’s actually…I have colleagues in the app space who did way more that. So, there really wasn’t a lot in…putting it in perspective, but… No, it was just…In that space it was just…we just had a system of just pumping out apps. So, basically what we would do is we would buy source codes from certain communities and then we would, you know, had a whole team, I built a team of artists and developers overseas leveraging up work which I’m sure most Amazon sellers do that as well. And basically, man, it was almost like a factory. We were just pumping out apps every single week. We were just risking source codes, many casino games, and kids’ games, arcade games. We were just risking with different themes, modify the games, and just literally be pumping out three to five, six, seven up to ten apps a week.

DAVID ALADDIN: Yeah, I mean, I actually have eight apps in my name. I’ve heard about that strategy, it was actually before the Amazon time. And like I was going to pump out…it was like a flashcard apps for every single type of, you know, test or quiz that people would have and sell it for 99cents. You know, it was very time-consuming. Not in a sense that it took a lot of time to create one app, but it’s like iTunes started catch on if you had too many apps. You know, it started moderating it more.

HAMEED HEMMAT: Right, yeah, no, definitely. You can’t just put one of the same apps and have four hundred of them or different versions of it. You got to have different apps, you know, what I mean? Do, we diversify casino, kid’s games, roulette, slots, all different types of games and we just pump them out to the app store. And did pretty well for quite some time, so… It was a lot of fun.

DAVID ALADDIN: Let get into the best topic, acquisition, which I think pretty much everybody wants to get their business acquired at some point or another. Let’s go through the process. Let’s say I want to sell my Amazon business. Where does it start?

WILSON: Okay! So, yeah, that’s one I can answer. So, first of all in term of where it starts it has to be…you have to have a reason, a rational reason. And we find that most of the sellers that we work with, they either sell for one of two reasons: personal reasons or business reasons. Personal reasons really include force down pool, changing priorities, you know, people who are looking to, you know, maybe diversify some of their income, maybe their time doesn’t allow them to dedicate as much, sometimes maybe unfortunate circumstances like a divorce, or maybe a partnership split, or a retirement. And that causes them to want to sell their business.

So, those are all very legitimate reasons for a sale. Most of our sellers sell because of business reasons. And those business reasons, if they are, for example, they may include being such as a changing competitive environment. A lot of times when, let’s say for example on Amazon, could be a flood sellers coming to that, you know, specific risk that includes change the risk profile for the seller or for the owner. And the owner may want to ship the risk to somebody else willing to take on that type of risk entering a new market. So, that’s a legitimate reason. Diversifying as well, I think, diversification. So, to channel that diversification is really important. A lot of times people who would want to sell because let’s say for example they need… When I find Amazon sellers, some of them…many of them are single channel Amazon sellers, but lot of them are multichannel sellers, they need to run a website and they may need to sell on other marketplaces.

One thing is that diversifying the channel is also a good portfolio management strategy. Another thing is to having really too many, you know, having too many eggs in one basket. You know, it happens with everything. Just even in the app business we talked about having too many app in the same genre like casinos creates a risk. It’s the same with Amazon. You have too many, you know, listings, you know, too much activity in a certain business sector that may be, you know, something that Amazon is growing in, or maybe have a lot of copycats who are trying to come in. That’s something that allows you to set for diversify. But the main thing that I find is that people are around when they recapitalize their business. They want to take some money off the table and they want to put it into other things. And I find that a lot of sellers want to do that. For example, seller who have built a business, they might have got bored and they want to kind of move on to something more exciting.

So, what they want to do is sell that business to somebody who doesn’t mind, you know, taking on a business that’s, you know, that is new. They are kind of interested in taking on new challenges and the sellers, they want to diversify and then raise capital and deploy that capital into another business, or it could be in other things that are just real estates. So, I find that those are kind of the…how do you say…the triggers for people to sell.

DAVID ALADDIN: I bet everyone has like one of these triggers at least. I mean, I definitely want to diversify a lot of my incomes straight from FBA just because… The income from FBA grows so fast that it kind of makes all the other incomes seem small. When do you think is like the right time for an Amazon seller to sell their business rather than to get too attached?

WILSON: Okay, well, a lot of the times, there are a couple of factors that sellers want to consider before they sell. First of all if you speak to most brokers they would say that the business has to be…has to have reached certain maturity point, age. So, for example, age is one of the I guess the baseline metrics that most sellers, or most brokers will measure the business. So, if it’s, for example something that is 18months old and above, that’s usually kind of the breaking point in terms of what they will take on. If it’s less than 18months old, a lot of brokers would say: no, there’s not enough history.

In our case, you know, we don’t restrict ourselves, you know, to that rule. We’ll take on any business, but we also advice the seller that it will affect the value of the business if it hasn’t reached that point. Second factor is that with any business it’s always very important to sell where there’s a positive trend. The valuations are…you know, the valuation of a business is based on a multiple of what’s called seller discretionary earning, or SDE, and those earning are based typically on the trailing you know, 12 months.

However, let’s say it could be, if your business doesn’t have 12months history for example, it can be forecasted forward. So, let’s say you have a business that’s 9months old. Well, we take the 9months, we extrapolate the 12months into the forecast and then base the multiple on that. If the growth is positive and there’s, you know, in terms of revenue and in profit, then that multiple it’s higher. So, for example, the typical sort of SDE multiple that most brokers ask for is anywhere from, you know, 2.5 to 3. You know, they usually just apply that rule. So, they say okay, your business is doing, you know, this much, and seller discretionary earnings then will multiplies by 2.5 to 3.

Our methodology is not quite the same. Our methodology is that we usually tell our sellers upon, you know, the initiation of our engagement that the SDE is usually quite wide. It’s going to be, you know, anywhere from 2.2 up to 5, and really that variation in SDE is very, very wide and it will depend upon a lot of factors, right? So, a lot of factors are, obviously one of them is what’s the growth rate. So, if it’s really accelerating obviously that will kind of move the multiple much higher. Is it a unique product, meaning is it something that they have branded, you know, that they’ve created and that they some exclusivity on. Is there limited competition into their barrier’s entry? Those types of things will increase the valuation. Anything that has less moving parts will increase the valuation. So, for example, if it’s an FBA business, if it’s, you know, large space to hold inventory, if that’s the way that they are going through, if that’s the business that they are in, then you know, that would increase the SDE multiple. So, there are a lot of factors. We try to measure all of them. I can give you, you know, quite a long list of those if you wish, but I don’t think you’d have the time to…

DAVID ALADDIN: No, that’s okay. I guess for me, like I want that 5x multiplier and so do you think…Would a product with 500 reviews versus a product with a 1000 reviews, would the multiplier increase or would it kind of stay the same?

WILSON: No, I mean, absolutely! I mean, there’s… Some of the factors that affect the SDE multiple, obviously one is reputation, no doubt about that. I mean, having 500 positive reviews out of a recent is going to be much more than, you know, something that has a mix of good and bad reviews. And that will increase the valuation of the business significantly. Another factor are things such as the product mix of the business. If it’s a single product business then that’s probably a lot riskier than a sort of business that has a multiple products because of obvious reasons: If you lose that one business thing or lose the buy box then you are going to be having half of your business threatened, right? So, those are those things.

Other factors, you know things such as leak times for product orderly. A lot of times the seller may have supplies that, you know, are not as reliable, they may have longer leak time, they may not be good to access inventory, or even the quality of the product and that all come at play into affecting the reputation of the business and the availability of the product. So, in that case, that really is going to affect the valuation. The terms that you have with the supplier as well, you known, the less favorable pricing and term. You know, these are all things that really affect the margins of the business and the valuation.

HAMEED HEMMAT: Even offline assets as well, you know. I don’t know if you mentioned these earlier, but even offline assets. Like do you have a standalone income store, or you are collecting leads, how big is your leads database? You know, do you have a Facebook community built around your product? You know, do you have following? Basically, do you have a brand reputation off of Amazon? I think that will also affect the valuation of the business as well.

DAVID ALADDIN: The 2.5x to 5x multiplier, is that the profit or the revenue typically?

WILSON: Let me just define what seller’s discretionary earnings are. So, first of all what you have is you have sort of gross margins of the business and the gross margins are the revenue minus the expense, the cost of goods, and any expenses. Some sorts of expenses are selling costs, you know Amazon, commission costs, etc. Now, once you have that gross margin then you have other expenses in there, oh sorry, then you have the costs in there. Then you have the net margin which is expenses like bank expenses, commission, etc.

Now, seller discretionary earnings really is a profit which excludes what they call added bags and they are really costs that the new owner would not need to incur. And so, for example, if the owner of the business pays himself a salary that is excluded as an expense, personal cost. So, for example, if the owner has a meal or charges his travel, and cellphone, and car expenses, those are also considered as add bags. Onetime expenses, so, for example let’s say a software upgrade or you know, in the case of Amazon it would be different, but let’s say that it was an expenditure in let’s say revamping the warehouse, you know, like buying a bunch of shelves retrofitting or whatever. These are things that happen only once and not so often and the new owner would not incur those expenses. So, that type of expenses is excluded in the calculation.

So, you arrive at that seller discretionary earning which is excluding the add-backs and then you take the multiple from there. And then what we do is we analyze the business, you know, according to what we just discussed and then we apply the multiple. Now, of course, when I gave it first to SDE, it was very large, I mean, 2 to 5, I mean, that… Again, most brokers are going to always try to, you know, they are incentivized by quoting a lower SDE because of what they want to do. They want the business to sell. And the reality is that selling a business is much like selling a house. You have to find someone that loves that business, like the seller, like the business dynamic, they’ll pay a higher multiple.

If they don’t like the seller, they find it very difficult to work with, they find the business has a lot of unfavorable dynamics, then they’ll ask for a much lower…they are not going to pay a high multiple for the business. So, there’s quite a wide range on the SDE based on the intangibles. And one thing that’s really important I find is support, so post-transaction support, right. Now, the buyer doesn’t really know what type of support the seller is going to offer after the transaction is done. But if it’s committed to in terms of a contract… So, for example, let’s say that the buyer request that the seller is going to provide, you know, let’s say, 12months or 6 months or whatever, 3months of post-transaction support defined by certain tax, that would really offer a premium to the multiple. So, it just shows a willingness of the buyer to work with…sorry, the seller to work with the buyer.

DAVID ALADDIN: Okay, so, at some point this SDE is calculated and the profit of the business is calculated, and you just find that multiplier and that gets send over to the buyer, correct?

WILSON: So, what happens is…the process is this: so, what we do…so, let me kind of explain the process for your listeners. First of all once the perspective seller decided to engage in selling their business based on the reasons we talked about or based on whatever reason they wish, what we do is we go over what’s called High Value Evaluation of the business. And that kind of really takes about a day. And actually we are doing that right now on our website. You go to mindbay.com/amazon and if you wanted to do that, you can actually submit on that form there.

What we do is we gather your what we call clean financials. Those clean financials are basically what you tell us. So, you tell us: okay, this is how much I am making revenue; this is how much I’m doing. And we ask for certain sort of financial…we’ll give you a template actually and you’ll see it out. We actually do some research in the business sector and give you a range; we give you a rough range. So, let’s say for example, if this business is going to sell for 3 to 4 times of the SDE. Now, that time the seller will decide, will make a decision: okay, is this what I want to sell it for? Okay, because this is why the broker is telling me is going to be 3 to 4 SDE probably. And they will say: okay, this is not enough for me, I rather continue run the business or let’s go ahead and move.

At that point there’s expenditure from our perspective, you know, I mean from our brokers. What we do is we have the seller engage in a contract with us so they find a contract. Typically the contract…because we are investing in promoting their business going forward and a lot of time a labor, we have a contract that allows us to represent them on an exclusive basic for a period of time, and that’s called the exclusivity period. That can range anywhere from, typically it ranges anywhere from 3months to 6months, depending on the size of the business and the dynamics of the business, that could change. But that exclusivity allows us to work and invest money in promoting the business without the seller moving their listing to another broker.

Now, once that engagement is confirmed, we go ahead and do a due diligence on the business. The due diligence means that we may take up to a week, to 10days, and what we do is we go into the needy greedy of the business. We go and prepare templates and we look at financial statements, audited financials, we access records such as, you know, for example screenshots or with provide analytic access, anything that we can do to verify the information that we’ve been provided.

We also verify who the seller is making sure that the seller actually owns the asset he’s claiming to own. And also their background, you know, making sure they haven’t…they don’t have the reputation that would be unfavorable to the buyer. So, we go through this process as a…probably a 20 point check list that we go through and based on that we start putting together a marketing package. Now, that marketing package will narrow down the valuation to a precise number and that number usually 90% of the time will fall within our first quoted range. Now, let’s say in the example I mentioned, we quoted 3 to 4 times, of 3 to 4 range in terms of the valuation. Usually it will fall anywhere between that. And if we find that there’s something that’s unfavorable, it will be at the low end. If everything looks good, reputation, the business is good, the seller is willing to, you know, get on call and provide post-transaction support, all those other intangibles, then it will be at the higher end of that range.

Included in the marketing package… The marketing package can range in links. But usually there is information regarding obviously the financials, common as FAQs and there will also be sort of a seller interview section, and there will be questions that we anticipate that all perspective buyers would, you know, would want to know. So, all that comes in the package and once that’s presented, created, we have the seller verify that and also confirm that the price is acceptable.

Upon the seller’s okay, we then proceed to promote the business. So, we promote it to various channels. First channels we promote it to, are internal database. In our case we have an internal database of more than 10,000 perspective buyers that we’ve collected throughout the years that we’ve been in business. And we also advertise on the public or on media, the business media where buyers would visit to buy a business. In the case of an Amazon business the dynamics are different than it is for an app business for example which we also work with. An Amazon business is a business that’s appealing not only to online buyers, but also to (inaudible 27:36). A lot of the Amazon sellers that are coming into the market are people who traditionally work more in retailing and they really want to go to…they want to become online sellers and Amazon is a natural first step.

So we promote our listings in those marketplaces that are appealing to breaking order buyers as well. One of the strategies that we implement that I believe help increase the valuation, increase the actual price for our client is…you know, we advertising and promoting our business on online media, but also on offline media, but also international media. Hameed and myself, we’ve worked internationally, we are comfortable, we have access to media of business buyers that are international. It could be somebody from Europe, it could be somebody from Australia, it could be somebody from Asia. We also publicize the business in those channels. And that’s something that other brokers, you know, don’t have at that level of expertise.

One of the real kinds of selling points of our business is that many of the buyers of any business, the ones that pay the highest valuation, are typically strategic buyers. Those strategic buyers are buying businesses because they want to maybe reduce the competition. So, for example, if you are selling, let’s say cell phones…well, that’s too big kind of a market. But just selling a product maybe like a certain type of cell phones accessory, and you have two competitors. Well, if one competitor has 80% or market, and the other two have a combine of 20%, it makes sense for the larger entity to acquire the small entities, so that will reduce the competition. Those strategic buyers typically will pay a multiple just to, you know, just to consolidate that subnet.

So what we do is that we drew an outreach program for our clients. We do the research into which those strategic buyers could be, not only online, but also breaking order. So it could be for example in the case of, you know, make a phone accessory, it could be a retailer, breaking order retailer. We contact them and we actually do outreach, we are not just, you know, putting ads out there and waiting for enquired to come in, we actually go and approach perspective buyers.

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DAVID ALADDIN: I like how you guys go through the entire process of walking through with the seller, getting the data from the seller and letting them fill these template forms which makes it a lot easier and less intimidating to sell your Amazon business. One of the biggest things that I actually was curious about and I was going to ask you outside of the podcast was once that negotiated price is made it seems like if you guys find a buyer for that price that you guys have the right to sell the business at that point, is that correct?

WILSON: Okay, yeah, so what we do is typically with a broker, obviously when we have moving targets, so let’s say that the asking price is a million dollars that we have agreed upon with the seller. Now, if we find a buyer that is willing to pay that amount typically in cash…so, it really depends on the terms, right? Because a million dollars in cash or in sort of an immediate term is different than a million dollars in but over 10years, you know, if that’s… So, you can’t compare apples, you know, there’re different terms of a deal. But let’s say the asking price is a million dollars and we find a buyer for million dollars, and the seller decides that they don’t want to sell it, so in that case there’re two options. Number 1 is that we would ask the seller to pay our commission, because there’s a cost involved as brokers, so we don’t want to be involved in the business of, you know, being sort of…I guess being led on.

DAVID ALADDIN: Yeah, that sounds fair.

WILSON: And so what we would say is: okay, well, the commissions would be due at the time they decide not to sell and that’s included in contract too. If however the terms are not right… So for example let’s say the seller says: okay, I am only going to take a million dollars and I am not going to…I’m not willing to do any type of earn out and that was made clear, it’s our job to sort of okay, kind of work towards that number. And we are going to get offers that are bellow that number, we’ll present it to the seller and allow them the option to choose. I mean, it’s obviously…at the end the seller can choose whether or not they want to sell the business and at what price, but we do put some verbiage in the contract to, you know, prevent any abuse, it’s how it works.

DAVID ALADDIN: Are earn outs typical in an acquisition or not?

WILSON: Very! Very much so!

DAVID ALADDIN: What’s the length of that usually?

WILSON: Well, I mean…there’s no sort of a rule out there because it really depends upon… With selling a business it’s almost a little bit like getting married, there’s no real template to, we do it with different terms on the marriage, right? And it’s the same with a business. But most of the time we deal with sellers, I would say 90% of the time, we deal with sellers that are willing to do an earn out but the earn out really not less than 6months. So, for example, it would be…typical scenario would be 80%, or 75% of agreed upon price paid upon closing, and then remained paid over a period of 6months. Really depends on the dynamics of the business, the risk of the business and a lot of other factors. But that how we call it. If there was some rule, it would be something like that. I would say it’s somewhat rare, unless the business is extremely attractive where, you know, the buyer is probably buying a house that is in a surging market you know to pay above the asking and in this case. It’s very rare that someone pays above asking. They always, yo know, kind of negotiate the price and they always have terms. It’s quite normal.

DAVID ALADDIN: When I heard it, I was thinking like 20year period payment, like the lottery, but…

WILSON: No, no, no! I mean, we do get offers like that from time to time that are quite silly. For example there’s a domain name that was sold recently, I forgot the name, but it was, I think it was for a Le Vegas domain, a big one, and the payment period, it was obviously a big money transaction, it was much more than $10,000.000, but payout for that was over 20years. And so it was like an equal amount over 20years. And so it really depends upon how motivated the seller is. I mean, some sellers, how they look: I don’t want to get involved in this business, I am retiring, I want to kind of move on, I am willing to, you know, have that earn out over a longer period of time. And so, I’ve actually might sell. You know, my history in MindBay is that I bought many businesses and a lot of the times when I, you know, there were factors such as the seller really wanted to move on.

You know, I actually structured myself where, you know, the deal was very stable for myself, you know, I would pay them over a period of time, but in contingent upon the revenue target that they forecasted, that the seller forecasted being met, right? So, it really depends on the risk of the business.

DAVID ALADDIN: Very interesting! Okay, let’s say the Amazon business got sold. How does that transfer period go down? The transitional, you know, the FBA seller profile, or how would that work out on your guys end?

WILSON: Okay, so, at this point, right, the … so, just to, kind of, go through the process here continuing on where we . . . so I think this is relevant. So, during the process that we promote a business, I am taking a step back, if you don’t mind …

DAVID ALADDIN: It is okay.

WILSON: I just want to, kind of, clarify a few points. So, we go and promote the business and we are going to get inquiries that come in and those inquiries are handled, now, we try to be time-efficient and we try to qualify the buyers. The buyers, we try to qualify them; number one, it is a proof of funds, you know, I want to make sure that they do have the money to buy, where actually have access to finances to buy, otherwise you engage in … the seller will waste a lot of time and our job as a broker is to kind of mitigate that risk and those time-wasters. So, we usually set up some screening process on the buyers and once we arrive at that list of qualified buyers on a periodic base, we will set up calls. Typically, what we like to do is set up group calls because the group calls, I guess they incite a competition, right, so we have five buyers on a conference call asking questions; usually, it is much better …

DAVID ALADDIN: It is awesome.

WILSON: Yeah, that is one of our strategies. We do a webinar style where they can post questions on text, they don’t get into a shouting match. Then, it shows to the other buyers or the bidders, the prospective bidders, that there is other interest and I think that is very important strategy to implement. So, at that point we get a person who expresses intent to buy and what we do is we do the letter of intent; so, a letter of intent is okay, they are going to buy the business, let’s say for example, for a million dollars. And the letter of intent is a non-binding agreement, it is not anything that can be taken to court but what it is, it just allows the buyer, the prospective buyer, a period of time to conduct due diligence and not have the business be shopped to other buyers, to other prospective buyers.

It is a little bit like an exclusivity period to arrive and to conclude the business and that is formalized by the signing of an asset purchase agreement. So, when the asset purchase agreement, which is the binding contract, is signed, that is when really the business is transferred. Prior to that, the letter of intent is committed to and at that point, the buyer will do their due diligence. So, the due diligence at this point is they would provide copies, not copies, they will provide information that the buyer can verify, it could be a financial statement, Amazon statement, vendor invoices, you know, it could be tax returns, you know, usually a P&L and a balance sheet – things like that, cash flow statement.

So these are things that are provided, contracts with suppliers, actually, contact with the supplier so the prospective buyer in his due diligence phase would contact the supplier to make sure they are still willing to supply and what the price is and the terms … Documentation the buyer would insure there is no litigation, pending litigation against the seller; any issues of paper tame are to effect, you know, pertain to the business or put the business at risk is done. We actually assist, the broker, we actually guide our buyers through the process, I have done this over fifty times in my career myself, acquiring a business; I know exactly what to look for. I guess that is … not trying to blow my own horn here but because I have conducted so many transactions unlike a typical broker who may not have been a buyer, you know, I can identify the steps in the due diligence process better than really anybody else; I know how to detect fraud as an example.

So, one of the most common strategies that buyers or sellers will do is they will claim that all of the traffic, for example, in a web business, they claim that all the business is organic traffic but what they don’t realize, what is the buyer won’t realize is that a portion of that traffic was not really organic but it was generated through the seller’s own network, it could be their own network of affiliate sites that they are using or it could be through paid advertising or it could be through their friends network of sites, right. And usually what happens after the transfer occurs is that all that traffic disappears and so we have a lot of experience through a lot of mistakes of our own in advising our clients, our buyers, to prevent those situations from occurring.

So, you know, we got through that process, usually the due diligence process takes two to three weeks, there are also firms that do due diligence as well that specialize in it so we encourage our buyers to use those firms and if they feel it is necessary and once they pick up everything and everything is kind of identified as not what the seller has claimed, for example, if the seller has claimed that all the traffic was organic but in fact that it was paid and through let’s say private blog networks, then the buyer could actually opt out of the all proceedings, they can actually not proceed, just drop out. Typically what happens is that the buyer will identify issues with the business and then negotiate a final price that takes into consideration those factors. So, for example, if they find that 50% of the traffic was paid traffic that the seller didn’t disclose, then the evaluation would decrease by, you know, an amount they would negotiate a new price.

At this point, assuming that the price is agreed upon, then we proceed to draft out an asset purchase agreement and that binding agreement is very specific to all the deliverables that were agreed upon. What we do is we take all the notes that were exchanged between the buyer and seller and also take notes during the meetings and we compile everything and we draft out everything that we … all the information that we have taken. We then present this to the buyer and make sure that everything is as they desire and upon that we then present it to the seller for confirmation. At that point, if they decide to proceed, they execute the business or they execute a transaction and typically, we use, you know, to provide security to the buyer and seller, we use an Escrow service and we transact the business.

Post transaction, this is when the, I guess, the closing or the transition period is and that is what we facilitated well which is the transfer of all set assets as part of the asset purchase agreement such as transfer of inventory, transfer of accounts, transfer of maybe business entity, any of the IP’s such as images, you know, source images, anything related to the business, we help facilitate that transition in a structured way. We usually set up a project for that and at that point, the training and transition period where the buyer … we also coordinate that as well, so it could be regular meetings, it could be a venue where they exchange the … where they set up meetings with one another and do a Skype meeting or whatever, there are many telephone meetings – we organize that as part of our service until the obligation is complete.

DAVID ALADDIN: That is a huge process.

WILSON: It is, it is. So the process itself, it is not like buying and selling a domain name. I mean, when you buy and sell a domain name, the asset is binary asset either you bought it and it is there or it is not, right, and you pay. And when you sell a business, depending upon the complexity of the business, I guess the engagement for the broker varies greatly. If it is an Amazon-only business with a single channel, obviously that is going to be much simpler than it is if it is a multi-channel business where there is a website involved and there is advertising and beyond, you know, for example, it could be other types of advertising, paper advertising, SEO … So the more moving parts there are, usually the longer the more involved the engagement or the post transaction engagement is.

DAVID ALADDIN: It is interesting you say that because, you know, having a multi-channel creates a more stable business but it also creates a harder or longer selling process … that is opposite but you know.

WILSON: Yeah, absolutely! Well, it is like most things, right, like selling a house that has, you know, you are buying the furniture as well and you are taking over the whatever the housekeeper’s contracts, you are taking over the gardener’s contract. So the more parts you have, so is it with the core assets, the more complicated it becomes. But we have never really encountered issues with that, I mean, it is just, you know, it is just execution and it is something that we are very skilled in both as a broker, as a buyer and as a seller; we have a lot of experience so …

DAVID ALADDIN: What was the link that you said where people could get a free quote on their Amazon business?

WILSON: So, if you go to our website, it is MindBay, mind like in the head and bay like a body of water, www.mindbay.com/amazon and you will see a form there, if you fill out the form either myself or Hammed will contact you and we will arrange for the preliminary evaluation of your business.

DAVID ALADDIN: And that entire process that we just went through, I was actually very surprised of how detailed you went into it. How long does it take when they submit that first, you know, their contact information to the actual acquisition? What is the typical duration there?

WILSON: Okay. So, typically … so it really, it is going to depend upon, a lot of times, the seller and how fast he can get the information to us. So when they submit the form, we will be in contact immediately, within a day for sure, and we will have an email out where we will request certain information so that information is really the financials, anything that can help us to do some evaluation on it. That is usually the lag, the lag is in the seller, kind of, providing us the information. Assuming that it takes only one day or a short period of time, we can actually conduct a preliminary evaluation typically within 24 to 48 hours.

At that point, it is up to the seller to decide whether or not they want to proceed; assuming that there is no slippage there, you know, there is no period of time, it will take us around 7 to 10 days to prepare the marketing package and the marketing package will require obviously the involvement of the seller but if the seller is actively engaged in providing the material that we request in a timely basis, we can get the marketing package done typically like I said 7 to 10 days. If the information takes longer and if we have to go to third parties like sometimes the financials to the accountants or whatever, then that could extend that period. But for us, that takes about 5 days of hard work and then checking, it will get to 7 to 10 day timeline.

Now, once we get the confirmation from the seller, we start advertising and when we advertise, we deploy those via various channels; internally, we are able to get that out as soon as we get the confirmation from the seller, we actually do a broadcast to our internal 10000 plus buyer list within 24 hours. We usually get responses thereafter. At that point, depending upon the attractiveness of the business, we could get offers, you know, within days. So if the seller really just wants to, you know, kind of move on, they can actually sell the business within a short period of time. Really, the biggest variable in the time of selling the business is really kind of in terms of marketing, in terms of the price. When we bring in the prospects, we bring in the bidders, serious buyers, the seller has to be willing to work on the price.

So if he is willing to be somewhat flexible on the price, the transaction can be concluded, you know, usually in a reasonable short period of time, I would say, typically we have seen businesses sold within … attractive businesses with positive growth, usually anywhere from 14 days to a month, you know, usually we are seeing significant bids because we ensure of that.

DAVID ALADDIN: Actually, I was writing the number of days that it took and it did land on 14 which is what you said. Very cool! So 14 days to a month from when you submit that form, www.mindbay.com/amazon. It was great to have you guys on the show today. Wilson, Hameed, Dave Aladdin – out.

]]>Today I’ve got two invincible kings on the show – Wilson who is the founder of Mindbay, a specialized Amazon brokerage firm who has handled over 50 transactions in the last 3 years. Wilson has been an online entrepreneur for over 20 years and has opera...
Hameed Hemmat, also a partner in Mindbay, has a background in App development specifically with iOS apps. He sold his app business recently that he was running for 5 years. He also operates a successful eComm store in the indoor grow space.

In this episode, you'll learn:

* How to sell your Amazon FBA Business
* How Mindbay sells Amazon and App businesses
* When to sell your Amazon FBA Business
* Why to sell your Amazon business
* Best practices for selling your Amazon Business
* Getting acquired
* What you need to do before getting acquired
* A very detailed step by step process that is involved

DAVID ALADDIN: By the way, this is the first episode where we’ve had two guests on the show at the same time. Can you guys take us to the beginning before Mind Bay? Where did your journey begin?

WILSON: Hameed, I’ll let you start there.

HAMEED: Yeah, let’s see… Well, I started in the app business… I am going to get to how me and Wilson met… But I started in the app business about five years ago. This was during I guess you can call the gold rush of the risk-in era where anyone who’s somewhat familiar with app development started in 2011/2012. Me and a friend of mine, we partnered up, we built about seven portfolios, meaning seven developer portfolios with over 400apps. Just recently… The way I met Wilson actually was through a brokerage because I was looking to sell my business over the past year. And Wilson ended up buying my business, so…which ended working out great, and then we became really good friends. And then we saw, you know, I guess you can say a gap in the marketplace with brokerages. And no disrespect to the brokerages, I worked with these guys, they are great. But we just saw that we could offer a better service and help other business being able exit their businesses. So, we decided to partner up, plus we became good friends and that’s kind of how we got to where we are at today.

DAVID ALADDIN: What about you, Wilson?

WILSON: Okay, so yeah, my background…well, my educational background is in engineering, so I have a system based background. But my career really started to focus on entrepreneurship and so I’ve been involved in probably over fifty different businesses at different level ranging from the CEO of one billion dollar plus firm to a total startup. So, I’ve done a lot of different things. Really my strengths are really systems based implementation, so, picking a business and scaling it, specifically in the sectors of ecommerce, Software and also marketplaces. So this is kind of where I’ve dedicated my focus. Mind-Bay was founded because I realized at one point that in order to sort of find business opportunities. Building it was why I started it, but it was hard to do because I guess setup of any business takes time. So, I just decided that the best way to approach being a serial entrepreneur is to acquire the business. And what I did was I created Mind-Bay primarily as an acquisition for acquisition.]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean53:37AS 81: How Ed Kohler built a 7 Figure Amazon Wholesale Businesshttps://amzsecrets.com/ed-kohler-built-7-figure-amazon-wholesale-business/
Wed, 22 Mar 2017 18:23:58 +0000http://amzsecrets.com/?p=5724https://amzsecrets.com/ed-kohler-built-7-figure-amazon-wholesale-business/#respondhttps://amzsecrets.com/ed-kohler-built-7-figure-amazon-wholesale-business/feed/0Today I’ve got an invincible king on the show, coming live is Ed Kohler, who’s 43 years old has been selling on Amazon for 3 years and is now doing 7 digit sales for more than a year.
What you'll learn:
How Ed built his 7 figure amazon business
Channels he uses including one big golden nugget
How he expanded into office space
Multi-Channel Fulfilment
Wholesale strategies
Wholesale problems Ed faces
Predictions and analysis of Amazon landscape
Amazon wholesale strategies
And much more!
DAVID ALADDIN: Great to have you on the show, Ed.
ED KOHLER: Thanks, David.
DAVID ALADDIN: So, can you take us to the beginning before Amazon, where did your journey begin?
ED KOHLER: Well, I guess as far as songs of our line it goes back quite a ways. That should have, I think I’ve set up for eBay at around 10 years ago, so I’ve sold stuff online for least that long. I think that’s a lot more tedious at that time because you’d have an auction closed and then you’d have to wait for a check to arrive in the mail, wait for the check to clear before you ship stuff out so that was pretty slow. But actually back then I also ran a small sporting goods software clothing company, where I’d sell stuff for a cross-country ski racers. I’m up in Minnesota. We have snow and so I built my first website around ’97 and actually I think I built it using the Aishima editing within Office ’97 which is tedious, but you know I learned something from that. But didn’t go into ecommerce in any larger way until recently. But it was still pretty fun at that time.
DAVID ALADDIN: Did you get like www.ski.com, or one of those crazy domain?
ED KOHLER: That would have been awesome, but yeah, I somehow missed the land grab-on on domains. That would have been cool. But actually, the product I sold was pretty fun. It was called the hand, and it was wind proof jockstrap for cross country ski racers because when you’re skiing wearing lycra ski suits and it’s 10 degrees or colder outside, there can be some issues for guys. So this product was four fleece jockstrap. Basically they had like a soft flex shell on top of it so it cut down on the wind. So anyways, it was called the hand because it was black with a white handprint on the front of it. So it made it kind of fun. But I’d get emails from moms of high school cross country skiers saying, can you make this without the handprint on. Yeah, yeah. Of course the kids want it with, because it was cool.
DAVID ALADDIN: So how much did that like retail for?
ED KOHLER: Like 17 bucks.
DAVID ALADDIN: Pretty good.
ED KOHLER: Yeah.
DAVID ALADDIN: It was a one product website?
ED KOHLER: Yeah.
DAVID ALADDIN: That how it started?
ED KOHLER: Yeah. I’m creating a bra. A sports bra called, The Hug.
DAVID ALADDIN: How did you get into that?
ED KOHLER: So, well, when I was into cross country skiers this is like the product to have. And I…
DAVID ALADDIN: Oh.
ED KOHLER: I don’t know. I have always been a little bit unto girls so I called up the guy that, who happen to create the product. He happens to live not too far from me. And I asked him if he wanted someone to be a rep for him because I travel around the country racing a lot. And he said, you know actually, I’d be pleased if you’d buy the company from me. I’ll just sell it to you if you’d like, because it started to come a little bit of a hassle for him so this is before things like [Inaudible] existed and so you’d have like the biggest holiday rushes like red roll on a holidays and so it’s like, it’s the last thing you want to be doing was going actually, physically into the post office as a huge stack of packages like, which was tedious. But, so I think for him, it just became a hassle. So then it became my hassle instead. But it was so fun. I learned a lot about just like an entrepreneur like, just everything that you might need to know how to do,Today I’ve got an invincible king on the show, coming live is Ed Kohler, who’s 43 years old has been selling on Amazon for 3 years and is now doing 7 digit sales for more than a year.

What you’ll learn:

How Ed built his 7 figure amazon business

Channels he uses including one big golden nugget

How he expanded into office space

Multi-Channel Fulfilment

Wholesale strategies

Wholesale problems Ed faces

Predictions and analysis of Amazon landscape

Amazon wholesale strategies

And much more!

DAVID ALADDIN: Great to have you on the show, Ed.

ED KOHLER: Thanks, David.

DAVID ALADDIN: So, can you take us to the beginning before Amazon, where did your journey begin?

ED KOHLER: Well, I guess as far as songs of our line it goes back quite a ways. That should have, I think I’ve set up for eBay at around 10 years ago, so I’ve sold stuff online for least that long. I think that’s a lot more tedious at that time because you’d have an auction closed and then you’d have to wait for a check to arrive in the mail, wait for the check to clear before you ship stuff out so that was pretty slow. But actually back then I also ran a small sporting goods software clothing company, where I’d sell stuff for a cross-country ski racers. I’m up in Minnesota. We have snow and so I built my first website around ’97 and actually I think I built it using the Aishima editing within Office ’97 which is tedious, but you know I learned something from that. But didn’t go into ecommerce in any larger way until recently. But it was still pretty fun at that time.

DAVID ALADDIN: Did you get like www.ski.com, or one of those crazy domain?

ED KOHLER: That would have been awesome, but yeah, I somehow missed the land grab-on on domains. That would have been cool. But actually, the product I sold was pretty fun. It was called the hand, and it was wind proof jockstrap for cross country ski racers because when you’re skiing wearing lycra ski suits and it’s 10 degrees or colder outside, there can be some issues for guys. So this product was four fleece jockstrap. Basically they had like a soft flex shell on top of it so it cut down on the wind. So anyways, it was called the hand because it was black with a white handprint on the front of it. So it made it kind of fun. But I’d get emails from moms of high school cross country skiers saying, can you make this without the handprint on. Yeah, yeah. Of course the kids want it with, because it was cool.

DAVID ALADDIN: So how much did that like retail for?

ED KOHLER: Like 17 bucks.

DAVID ALADDIN: Pretty good.

ED KOHLER: Yeah.

DAVID ALADDIN: It was a one product website?

ED KOHLER: Yeah.

DAVID ALADDIN: That how it started?

ED KOHLER: Yeah. I’m creating a bra. A sports bra called, The Hug.

DAVID ALADDIN: How did you get into that?

ED KOHLER: So, well, when I was into cross country skiers this is like the product to have. And I…

DAVID ALADDIN: Oh.

ED KOHLER: I don’t know. I have always been a little bit unto girls so I called up the guy that, who happen to create the product. He happens to live not too far from me. And I asked him if he wanted someone to be a rep for him because I travel around the country racing a lot. And he said, you know actually, I’d be pleased if you’d buy the company from me. I’ll just sell it to you if you’d like, because it started to come a little bit of a hassle for him so this is before things like [Inaudible] existed and so you’d have like the biggest holiday rushes like red roll on a holidays and so it’s like, it’s the last thing you want to be doing was going actually, physically into the post office as a huge stack of packages like, which was tedious. But, so I think for him, it just became a hassle. So then it became my hassle instead. But it was so fun. I learned a lot about just like an entrepreneur like, just everything that you might need to know how to do, like create labels, or ring in supplies, or you know dealing with supply-chains issues, manufacturing. Like, there’s a, you know, it was all a very small scale, but still you’ve got a taste of everything.

DAVID ALADDIN: So, did you acquire it from him or did you end up selling that business?

ED KOHLER: I end up selling it. I bought it from him

DAVID ALADDIN: How much did you get for it? Hope you don’t mind me asking.

ED KOHLER: Oh, I didn’t get much for it by the time I sold it.

DAVID ALADDIN: Yeah.

ED KOHLER: But I kinda gotten eventually in the same thing that he did like started a family and stuff. And got busier…

DAVID ALADDIN: I hate that.

ED KOHLER: Oh, it’s a hassle for me now. So, it was not quite big enough to deal with, but…

DAVID ALADDIN: Yeah. And so, ’98, you had a small size setup and then in 2007 you had the eBay setup. And you did that for 10 years. And how many, like trolling on eBay I’ve actually started to see, you know I’ve doubled up there. Let’s talk about strategies on eBay, because I feel like we just list products a lot on eBay and we don’t really focus on increasing sales. Is there things that like I’m missing out, like in terms of what I’m doing with my listings?

ED KOHLER: Well, I don’t know. I think there are a lot of things, like there’s just so much going in Amazon. Just syndicating your content can be a good way to pick some incremental sales. If you’re selling replenish-able products, then there’s more justification for doing that, you know.

DAVID ALADDIN: I see.

ED KOHLER: If someone’s business is just purely retail arbitrage, where you know, you’re buying just a handful of items that you’ve find on sale somewhere, you put one in Amazon. There’s not a lot of incentive to really syndicate those around to other places because they’re just going to come and go. Like you have more of a challenge of finding enough inventories often than figuring out how to move it. But if you have products that you can get in larger quantities or replenish-able, then maybe it’s worth syndicating them to other places like eBay or other stores, but, I don’t know. For us, like still one of the primary things we use eBay for was just to clear out our returns so when stuff comes back we’ll put it on eBay at 99 cents together with the party mail shipping and you know just let it ride so it’s gotten a week. So…

DAVID ALADDIN: Poor eBay.

ED KOHLER: So it doesn’t just keep accruing. Well, people they get some good deals out of it. There are things that, people definitely have gotten some good deals, but to me the deals, I just need the space back so it’s good for that. But I do syndicate all of my inventory over there, and use Ship Station to tie that all together for fulfilling orders. So that Ship Station is probably one of my favorite pieces of software. It’s just such an efficient thing to use but like when I put something on eBay, if it’s something saying, like what the Ship Station rule I’ve set up are, when… when the eBay order comes in, the Ship Station firsts checks to see if the product is stock in Amazon, and if so it will fulfill the order, you know from an Amazon warehouse. And if not, it kicks it to me and then we go find the product and ship it out. So, you know, if it’s just something I’d seen in Amazon, its, you don’t even have to touch it.

DAVID ALADDIN: Yeah, yeah. You know like one of the cool things I like to buy at Ship Station is you can quickly copy like you know the four, if you’re trying to send a replacement to an Amazon costumer, you can just copy that entire thing and just paste it in the Ship Station. Whereas if you’re trying to fulfill an order in Amazon you’ve got to copy each one; one by one. So…

ED KOHLER: Yeah. Like the name and address and City, State and Zip.

DAVID ALADDIN: Yeah. That takes a lot of time.

ED KOHLER: Yeah. It just pops it up.

DAVID ALADDIN: Yeah.

ED KOHLER: Yeah. That is a nice feature.

DAVID ALADDIN: So, what kind of rules do you, I mean, I’ve seen the rules set, it’s inside of Ship Station. Is there like other optimization that you can do with the rules?

ED KOHLER: Yeah, like I’d, I have some sort of for things I want to ship myself it’ll have; it’ll pick the weight, like based on the weight. Like if it’s under a pound, it’ll automatically select that it’s going to go first class. And you know, there are things like that where you could just, you get a little bit further along than starting completely from scratch. And then of course, it will remember everything that you ship. So if you shipped the same thing more than once, you don’t have to keep putting that stuff in, that’s definitely keeping it. So it’s like you know, this is always going to be the exact same weight, It’s always going to be shipped on a 6 x 9 bubble pack, so we don’t need to start from scratch every time. So that really speeds it up like I remember, when I stop by my office yesterday morning, I had about 26 orders coming overnight that were going to go out and I had only two items that I need to configure the weight on, just because they were like multiples, so I just wasn’t sure. Like I had the weight right, but I just didn’t know for sure. So, I was like, oh, just going to touch up the weight on these two and then print out 26 packets, slips and labels, and so you know I’d, I was at the office for about two minutes I already had all the labels coming off the printer. So you know it’s pretty efficient.

DAVID ALADDIN: And, so, I’ve actually, because I’ve just gone into Wal-Mart, and I do get orders but certainly not, you know what is the optimization, do you have the drive to the post office? Do you have them come pick-up the orders from your house, or… how’s the setup on your side?

ED KOHLER: Yeah. Well, we have UPS come every day. They’re picking up Amazon inbound shipments every day. But don’t take anything that’s UPS related. And the post office also will just grab anything that’s ready. I really, they seem to come by around 2 – 3 o’clock. But I don’t know. I actually, my office is between my house and my kid’s daycare so I usually be able to just pass through there and pack up anything quick on my way to my kid’s daycare. So if it came in before like 4 o’clock, I can usually get it out the same day. So that definitely helps to have some pretty fast turn-around on orders. And you know what, since everything is packed up, I just throw everything in IKEA bags and drop it off in the post office to just dump it on the desk, you know because it’s all metered you don’t have to talk to anybody. I’ve tried to experiment a little bit lately with the Ship Stations in the day sheet and I don’t know a lot about this but it’s my understanding that you can basically print off the sheet and as a manifest of everything that’s in your shipment for that day so that UPS can, USPS can just scan that one barcode.

DAVID ALADDIN: Wow.

ED KOHLER: Without having to scan every item. So it doesn’t really save me any time but, if I’m walking in right at like 4:59 p.m., they like that, so.

DAVID ALADDIN: I usually, you know, for like the smaller type of owners they just turn in this, they have like this drop box over there, you know, the one that swivels very cool. So you say you have you said you have an office. Is there like a warehouse attached to it or how’s that so?

ED KOHLER: It’s actually, it’s my office/warehouse base but it’s about like about 400 sq. ft. of space, really. It was I think like a barber shop or something before I had the space. It’s like a little like red brick, 100-year-old retail building in the neighborhood and you know, it has some limitations like, it doesn’t have a lot of space which is probably good because you kind of grow to every space you have, and I’m, I want to sell stuff not store stuff. So…

DAVID ALADDIN: Yeah.

ED KOHLER: That’s all right. But if I got a different space today I’d probably get something that I could put a build a pallet in so, because I don’t have a door large enough that I could, you know, built up a pallet for to get picked up and I don’t know, overtime with a lot of stuff I saw in Amazon, there’s a lot of like health and beauty products and things like that. They’re just getting kind of heavy sometimes, where if I’m shipping in a hundred or thousands of units or something, you know. If I’m going to ship a thousand pounds stuff, it would be nice to put it on a pallet rather than…

DAVID ALADDIN: For sure.

ED KOHLER: Twenty moving boxes.

DAVID ALADDIN: Yeah. I started sending in pallets. You know, usually I just send them straight from China but just circumstances I started storing stuff to keep over the velocity and the pallet shipments are, is actually not as bad as I thought it would be. Have you put a pallet together, yet? It’s nice…

ED KOHLER: I haven’t built one myself, but I buy a lot of stuff from wholesalers that go in on pallets and you know, it does have a slightly different work flow but I didn’t find it confusing. You know, I’m just starting to figure out, you know, understanding like the bill of lading will come out on the day the shipments could be picked up. You got to send that to them so they can drop off the order and but I don’t know. They’re just itemizing it just like anything else so, it’s not too bad. If it’s up to the wholesalers it’s usually like a buying you know hundreds of sku’s it’s pretty simple. And you know, everything is in cases so, it’s like I have this many cases than this, so… I’ve received cases, I’ve received pallets but we just have to break them down before we bring everything in the door. At least, drop it on the sidewalk.

DAVID ALADDIN: Let’s talk about that, like are you buying from the internet or are you buying from wholesalers that you call up? How does that work?

ED KOHLER: The, with wholesalers, gone to a few shows things like AST or the Toy Fair. And you know, you search out, make some contacts, find some products and see if they make sense, there’s a variety of different piece of software that can kind of help you like bulk process, a spreadsheet of listings to find out you know, what might be worth selling. So, you know, if I get a spreadsheet of UPC codes and cost data from a wholesaler, you can run that against Amazon and find out the profitability which of those products and then the next step is to figure out, well, do they actually moving or not. You know, if this product will sell 10 units a month or a thousand units a month. So you can figure out whether it’s worth bothering to deal with. Overtime you’ll figure out what works. And you know when, when I was receiving pallets, with a lot of health and beauty health things, you can’t really make the numbers work unless you multi pack it.

Like it’s hard to sell one unit of like a toothpaste or a lotion or something. It’s just so much of the cost is eaten up by fulfillment costs but once you make it a 2 packs or 3 packs or something, it starts to make more sense. So I’d receive a pallet of stuff and poly bag it up and just turn around and ship it in.

DAVID ALADDIN: Very cool. What worries you about Amazon? I have so much worry about how big it’s gone, you know. If you got all these inventory that you’re wholesaling, what if, you know that fear. I guess I could, every Amazon sellers has been, that fear of suspension but does that come up in your mind, or…

ED KOHLER: Yeah. I dealt with the suspension about a year and a half ago. I think it was July of 2015, now. And it was definitely a very tedious to work it. At that time I was actually in the process of on boarding with Amazon Canada, and I was on UK, and one Amazon US decide to suspend me. The Amazon I think, Canada rep that I was working with says like, what is going on? Like, I don’t know. I’ve never been through this before, just like. So, they were really helpful. The reps actually helped me write my plan of action and you know.

DAVID ALADDIN: Nice.

ED KOHLER: There, because, when Amazon shut me down in the US, they also shut down my other accounts. So the Amazon UK, they’re in the process of helping build listings for me, for all my inventory that wasn’t already on Amazon UK like they had a team that was willing to do that, because like, oh, this guy is losing volume help get up, up and running and then I get blocked to like, what the heck? We want this guy. We’re trying to get this guy in our platform and you shut it down. So it’s just tedious but you know coming out of it, I think pretty much anyone who has been through suspension probably ends up running a better business after that. You do learn something from the process. I think it’s a, you know it’s a pretty heavy hand. And I think that particular time period I think the spring of 2015 I think, I think a lot of people got suspended like within a few month period right then, because I understand that I think they might have come up with some new algorithm that was for certain types of customer dissatisfaction cases and it just kind of, they didn’t really do a good job of looking at like, what’s the rate? Like this person is selling 10,000 units a month and there’s been three complaints. All right, well, we’d rather there not be three complaints, but that’s a pretty low, you know, order-defect rate. I think they didn’t do a very good job looking at that side of it. But I don’t know. And I don’t lose sleep at night about suspensions now because I feel like I’m running a pretty clean business and not you know, doing sketchy stuff that would piss off Amazon. So, but it still can happen.

DAVID ALADDIN: Yeah. I guess, it’s just like an ongoing fear that I have, I mean the bigger the business gets the bigger it falls if that suspension hits but…

ED KOHLER: That’s for sure.

DAVID ALADDIN: So, in terms of like your holdings, do you have, like… like I’m like 80% into the Amazon business and I’ve just been diversifying lately but what about you? Someone who’s been selling for three years, do you have a lot of holdings inside of Amazon? Or do you kind of tend to diversify your assets into other locations.

DAVID ALADDIN: No, no, no. Like, I mean, like, so if Amazon was to shut you down tomorrow per se. Would you be entirely screwed?

ED KOHLER: It would definitely be a problem. Yeah, it’s a very, very large percentage of my business at this point.

DAVID ALADDIN: Yeah, because I was thinking, like it wouldn’t it be a big deal if I only put like 30% of my wallet into Amazon versus like all most of it. I mean, because right, I’m, I’m fairly young, and you know, I kind of went all-in and if it did happen tomorrow, I’d be kind of screwed if it, if that was to happen you know. And so I’ve been trying to like de-risk my business away from Amazon as much as possible.

ED KOHLER: Sure. Well, I don’t know. I try to think about what, if Amazon didn’t want a business like mine on their platform, what kind of business would they like? You know, if there’s got to be a heck of a lot of businesses that’ll get suspended before me, that’s the way I look at it. So you know I’m, there, I know there’s, people really kind of push the boundary’s on, you know, just sketchy sourcing of items and or, I don’t know. There’s some things that like, one thing I, two years ago the idea that I want to do now is like source them like a TJ Maxx. Where you know you’re going to get margins sourcing from a place like that especially if you, because you can buy gift cards for like 15 or 20% off. So you know, if you are, you’re, like the numbers already work and then you can get this gift cards that are like such a huge additional discount that the numbers can be pretty good. But to get a product from there to someone, you know, through Amazon and landed on the customers house and have that product be an absolutely perfectly mint condition? I think it can be a challenge like because everyone in those TJ Maxx product has a sticker on it and those are not easy to get off without causing some damage to the box or leave a little sticky residue and stuff like that and you know if something, if someone’s buying something that’s new, it better be 100% new. So, it’s just a harder argument to make that.

You could have a dissatisfied customer pretty easily with something like that, that it’s hard to say like, yeah, we picked this up out of a shelf at TJ Maxx and dust it often. Yeah, it’s new, you know. So it’s another case to make then. On the other side of it, there’s a board game that I sell. And a customer complained that the box they received well like the plastic was, like the shrink wrap was torn on it and there was like a dent in the product and stuff and like, this is, how can you this is new? I agree that is not a new product. But, and so Amazon, they, you know, they received the complaint and passed it along but when I was able to reply to Amazon saying, if you look you can see that all of the product that you’ve received from me came in case packs, absolutely brand new. So that product that person received the reason its not new see here, is because of how it was handled in Amazon’s warehouse, how it was shipped or you shipped the product co-mingled from somebody else but, I can say that my hands are clean on this one, so.

DAVID ALADDIN: Oh, very interesting.

ED KOHLER: I think it can help really. If you have a clean supply chain, I think that really is going to help.

DAVID ALADDIN: I’ve actually never thought of that perspective of case pack versus individual pack. The case… In terms of like shipment pallets, like it’s a lot easier to individually pack—I’m trying to remember the reason why it’s because case pack is to be exactly you know, 12 units in a box, or whatever, but individually you could have like a weird number but, okay. How’s your logistics look? Does the inventory come to you or does it go straight to Amazon? How do you set that up?

ED KOHLER: So with that, with the wholesaler, I mean , you know, we build up a shipment and sometimes we’ll just base on size or you know, different… you know Amazon wants to go up different places for different reasons but you know the wholesalers tend not to get that worked with the ways to not get too excited if I’m going to build something into like 4 different shipments like, okay, I need this secure warehouse. This is the standard stuff here and then here’s the oversize stuff here. And then this stuff needs Amazon labeling. The whole sellers not going to label it for me so then you might have a whole oversized and non oversized labeled stuff so eventually I’ve just figured out like just pair it down to the ones that were actually working well and keep it a little bit simpler and you know, occasionally rounds it up and make it a full pallet because they, if they say like a pallet of items would be like 600 units of a particular product and I really only need 400, you know, it’ll make them all happier if we just make their life easier like taking this whole pallet and ship it. That’s nice and simple.

DAVID ALADDIN: I like how you mentioned you know, just kill the bad products and just focus on the good ones. Stuff like something I’m doing right now with, you know, cleaning some of my bad inventory.

ED KOHLER: Yeah.

DAVID ALADDIN: You have to make all the difference for between 20117 and 2016.

ED KOHLER: You know that’s something that I think it pretty much every conference I’ve gone to has had experienced source someone goes on stage and says, stop falling in love with your losers.

DAVID ALADDIN: Exactly.

ED KOHLER: Just get rid of them.

DAVID ALADDIN: But I love them!

ED KOHLER: Keep your money back. Like, it’s, you know exactly. The prices going to come around, everyone else around is going to stock it and then I’ll get that price I really wanted. All right, Maybe But it’s…

DAVID ALADDIN: It’s the emotion. You can’t touch emotion.

ED KOHLER: That’s probably one of the things… No. You just have to move on with it. But having like a good system been placed just let, this is one ride I haven’t figured out quite yet is the just put some roles in place right extra more days to automatically re-price down stuff and so nothing sits for a super long time before you notice that it’s been there collecting dust at Amazon, running up your storage fees, which those are, Amazon I think, you know, they say they don’t want to be in the storage business but I think that they still haven’t done a really god job of making it like making it clear just how much storage costs people. Like if that was…

DAVID ALADDIN: So true.

ED KOHLER: On the dashboard, like dude, this product is going to cost you like, you will never make your money back on this if you get hit with another storage fee. So either throw it away or get whatever you can for it this month. Like, I think people will be motivated by that instead of—because when that storage fees come through it’s just kind of like deducted out of that. Accrual is happening so it’s almost like an invisible cost.

DAVID ALADDIN: Let’s talk about that. I just see a number. Like mine’s like, during Christmas it’s terrible. I don’t even want to say the number that show. But right now it’s right around 900 bucks a month and it, there’s no breakdown, you know, per unit, right? Am I missing something?

ED KOHLER: You can get into a storage fee report that will show you product by product.

DAVID ALADDIN: Really?

ED KOHLER: What it’s going to cost you. Yeah.

DAVID ALADDIN: I’ve been trying to find that report. I couldn’t.

ED KOHLER: I’ll see and link it to you if I can find that report. It will break it down. And sometimes it’s, sometimes you’ll see stuff on there that doesn’t really make sense. Where like the product dimensions appear to be off? That can be really scary where, just like this product can cost you $500 this month, and like, that’s impossible. That product is super small like because you know the storage fees are based on you know volume, so there’s no way it should be that big. But some emergency stuff like that can come up to like where you’re being just penalized because the weight is off or you know, because the dimensions were off. I’ve seen suffer the weight being off is also affected just what it cost for what is Amazon charging for fulfillment cost where, it’s like the product is 2 ounces but some seller went in and changed it into 2 pounds accidentally and now the fulfillment cost got insane. So weird stuff can happen sometimes but I don’t know. I mean, yeah. Keeping an eye on those there is a report that does it all. I’ll send you a link on it when I find it but it’s a great way to like…

DAVID ALADDIN: Dig down, yeah.

ED KOHLER: Just put it in your calendar here’s the, where the pain is, all right, like it or not, this seasonal product and it’s really not going to start moving until July can I deal with that or what, let’s get it over there, do something with it, or then, like stranded stuff. A lot of that stuff echoed port right away but I’ll usually, instead put it on eBay and just instead of pulling back to myself hole, just, you know, fulfill it to a customer that buys it on eBay. Now then it works pretty well.

DAVID ALADDIN: Let’s go to multi-distribution. This is probably one of my favorite topics because I just want to diversify my assets into multiple locations rather than just making all my money from Amazon or whatnot. Have you been diversifying into other channels of your inventory?

ED KOHLER: Yeah. As I think, it’s my kind of sourcing strategies change where I’ve gotten more into replenish able items than its non, then I started to say, well, all right, I can get this product on a consistent basis from a wholesaler so I’m going to try and increase my incremental sales in any way I can. In case of, like, you know, other health and beauty products, there’s many ways of doing it just within Amazon itself, make sure that the product is replenish on in every existing ASINs. So if the product is like a multi-pack, you know, product, there must be a ton of listings for that product that you could be on. And sometimes you could benefit if you keep the inventory local then and so, like you might have a product that’s listed on Amazon as a one pack or two pack, up to a 12 pack or 24 pack case. So why not sell then every single one of those. So if you keep the inventory you know local it’s actually just easy. If an order comes in…

DAVID ALADDIN: You packed base on…

ED KOHLER: Yeah, Just roll that many in a poly bag whatever.

DAVID ALADDIN: Interesting.

ED KOHLER: Bu then you know, you can, then of course expand it into selling in other market places as well so currently I think I’m on, well, I’m on Canada and Mexico through the Unified account, and UK. I just started on boarding Japan, but that’s off to a pretty slow start. But you know I’ve been working with her in virtual assistance. I can just, all right, here’s the list of all my ASINs and here’s the SKUs I’d like to use and go through and build this up for me on different platforms. I’d give her a call log to work from. Yeah, you know there’s some timework involved in that, but it is, you know, just getting that listing going is you know a one-time work. Once it exists, you know then you can just toggle the inventory up and down, so. But someone has to go on and build that listing the first time and there’s some software out there to work with that, but I haven’t had any good luck with it like, Geeks Seller for creating listings on Wal-Mart. It’s, at least it has a web interface that somewhat similar to like what people are used to for building listings in Shower central. But it still, it gets cranky because there’s a ton of times where you create a listing and then you go in your Wal-Mart account, you look at it, it’s like, oh, yeah, that’s good. Oh, except it’s the wrong multi-pack or something. Like, I want to create a four pack and now it’s a one pack in Wal-Mart. And so, I don’t know. It’s messy.

DAVID ALADDIN: Yeah. I’ve actually experimented with Geeks seller. I do like the interface a lot. So she, from coming from other software that have tried to create the interface between Jet and Wal-Mart, so.

ED KOHLER: It’s certainly better enough, yeah. It’s really not their problem as much as the batching is done in Wal-Mart side, with the Geeks Seller data that caused the problems. I mean Sellers has given whatever data that you put in so.

DAVID ALADDIN: They’re smart though. They take I think 1% of your sales and not your revenue, so.

ED KOHLER: You know what, yeah. You know what though? That is still, I think better than a lot of companies out there because with a lot of the. . . at least the multi-channel programs out there, they’ll do 1% sales but it will be based on your overall sales so this where like it just becomes [Inaudible].

ED KOHLER: Oh, jeez.

ED KOHLER: Because like all right, saying like I’m doing like a million dollars a year in Amazon and I decide I want to start selling on Wal-Mart and you know, EBay or something like that. Well, I’m only going to have 1 or 2% of my sales at first out of those platforms. But I’m paying 1% on all of that, so…

DAVID ALADDIN: Who charges that? Let’s call him out.

ED KOHLER: Yeah? I guess it’s pretty common for this coming from in those spaces. Like you’d have like a, there’s so many I’ve tried. I’d tried Skubana; it worked pretty well. But, that, the incremental sales did not justify the costs for me, you know. At some point maybe they would have but I’ve tried that for maybe like three to six months sounds like, this is somewhat important, like I saw the potential on it but not enough to justify the costs. It was so just so said I get out of that. I know I tried once, what’s it called? It’s from the West Coast. We’ll celebrate, I don’t know what their price, but they kind of playing that space. Oh, Stitch Labs. Stitches now.

DAVID ALADDIN: I think they’re pretty expensive, right?

ED KOHLER: Yeah, because they use that same kind of a model, I think. I think channel binds with us to, I haven’t tried that one but, I don’t think I will. So, at least with Geeks Seller the nice thing is, you’re paying that 1% but you’re only paying on that one channel. So I don’t really have problem with paying that compared to like I’m not getting a benefit, from. Like if from, if I am just going to sell it on Amazon, I will just sell on Amazon but paying a monthly commission based on my Amazon sales in order to sell on Wal-Mart just, that hurts.

DAVID ALADDIN: What do you think about Wal-Mart.? How are the sales over there for you?

ED KOHLER: They’re not bad. I’ve had a few products that have done pretty well. But it’s been slow. For me, I think largely because of this multi packing, of a health and beauty products because they just won’t allow a lot of those products because a lot of them do go on with like a goofy UPC or the, like the UPC called Kellogg. It sounds like they only want the UPC code in there once, and so that it would be for the one pack. And it’s like, well if you guys only want the one pack, this is just a dead on arrival product to sell online. So, that’s kind of a problem. So, I need to try and talk to them about that and it’s like you know, have some products that are multi-packed, products that they sell, you know, $10,000 a month or something in volume, but I can’t put it on Wal-Mart because they won’t allow it with the, you know as a multi-pack. So, you know it’s hurting them but it doesn’t help me but, I know it was out if they’ll just allow it. So first kind of painful so, I don’t know, I think overtime may be they’ll start to loosen up on that a bit. But that one is tedious.

DAVID ALADDIN: And have you gotten on to Jet?

ED KOHLER: I haven’t got on Jet I guess I think I missed that window where they’re letting people in. I’m sure I’ll come around but this is all, letting in a lot people in right now.

DAVID ALADDIN: They’re not a proven product really, or at least they’re not improving it like relatively fast, it’s just like Wal-Mart was fast. I submitted at the same time and it’s still on their approval or under pending approval. So we’ll say.

ED KOHLER: I’ve had a few friends dragging down a Wal-Mart lately and in that case, when they’re going through the questionnaire that Wal-Mart puts out, I get the impression that what Wal-Mart really wants to know is like, are you capable of putting something in the box in a timely manner? So you know to ask him how much storage space you have, and all this different questions, but I think the real amount of it is like, if you can just say to him, if an order comes in by 2 o’clock I can get it in the mail at the same day. Or something like that. Like what do you guys really asking here? Like are we here to fulfill stuff or not. Like, I think they want to know you’re not going to be fulfilling stuff from Amazon, cause you can’t arrived in an Amazon box, the people.

So you either need to fulfill it yourself, or have some kind of third party fulfillment center setup in order to do it and they want to just understand you’re confident. But, I think for private label seller friends of mine, I think some of them are looking at that and like is it were like jumping into this soups so like, I don’t know what it is. Unlike it’s can be pretty tough to get online, like if you just have like a small handful of products like you just don’t have much of a catalog, might be tough to get Wal-Mart to approved them. They might be better off just partnering with someone which already is approved and say, you know can I ship a case to you and have you fulfill this orders like just might be easier. After that I’ll think about it because it’s, you know checking out an entirely new platform and just the hassles that can come with it or understand the customer’s service and all that stuff, like if it’s only going to be a small handful of sales like is it worth the effort? It might be easier otherwise do it?

DAVID ALADDIN: I felt like the Wal-Mart channel has a lot of potential, just I’ve only been on it for maybe for a week or two and it’s shown a lot of promise similar to eBay, in terms of just sales that are growing. I’ve zero reviews on any of the products. I’m in private labeling; I know you’re on wholesale so reviews I’m trying to build up over there to. I, like from I’ve seen in the algorithm it’s apparently if you got like one review you showed really well compared to all the other products that don’t, so.

ED KOHLER: Yeah. The bar is pretty well to have a, this show’s interaction. This is an actual product.

DAVID ALADDIN: There are no reviews on Wal-Mart. It’s interesting. And if there is, that product is ranking really well so.

ED KOHLER: Yeah and Wal-Mart, the inventory it plays well on Google. Like it’s easy to find there and it will show up taking Google shopping as well. See, one kind of long tail platform that I’ve had pretty easy to work with is bonanza. B O N A N Z A.

DAVID ALADDIN: I haven’t heard of it.

ED KOHLER: No. like, they’re like syndicate your eBay. Like they have the thing that would can such authenticate your eBay account, and opposed off over and I think they’re just pretty good at SEO, so like they just seemed to do a good job in getting visibility for inventory online. So if you, you know just have stuff over there, it doesn’t take a lot of work to get a built up on.

DAVID ALADDIN: Sweet. I’ve never…

ED KOHLER: Bonanza.

DAVID ALADDIN: Yeah.

ED KOHLER: And then bonanza ties in with Ship Station, so when an order comes over, it’s just like any other order, like sure I’ll take it. So

DAVID ALADDIN: How are the sales over there?

ED KOHLER: They’re not bad. They’re even better than Wal-Mart. So it’s goofy that way.

DAVID ALADDIN: I am moving to that channel, too.

ED KOHLER: Yeah, it’s just… They just seem to be good at SEO. So, they get your inventory there and the catalog just starts popping on a like Google search and stuff like that. I don’t know. Have you done a Shopify store for yourself or in any…

DAVID ALADDIN: Yeah.

ED KOHLER: Or any kind of personal store?

DAVID ALADDIN: Yeah. I get this in traffic conversions pretty low. What about, what other software do you use? Have you been Facebook advertising or?

ED KOHLER: I haven’t done any Facebook ads. I do quite a bit on, on Amazon especially for like multipacks that’s such a gold mine, cause you can, you know just take this listing ad, you know, and assuming the prices are competitive like, you just letting in people who are looking for that product know that it’s available on a certain multipack that make sense to buy it in. So the, just the cost of sale can be just amazing on that kind of stuff, cause, I mean pulling people who really see in the air, people that they already decided they want that product, they’re just trying to figure in which quantity to buy it in, so that can be great. I tried the thing, that was like really long tail right, run ads against UPC numbers on Google, to drive people in to Amazon, where was like the people search that long of a tail like down to the UPC code. But that was not enough, not enough.

DAVID ALADDIN: I like that.

ED KOHLER: But, you know, short of that though, for like you know retail products, people do search by a making my own number, so like I used to do a lot of affiliate marketing. And a one really good tactic was the by the make and model number. So like on Amazon, it’s been about like six or eight years ago now, but I would buy like dual XG37JX were like, where like a specific kind of a drill or you know, other types of power tools.

Where it was early enough that people did even necessarily understand that Amazon had power tools, but you know someone would be out in Google, you know Googling a term like that where, the person who’s doing that, they’ve already decided what they want to buy. They’re just trying to figure out where they’re going to buy it from, you know so they just kind of doing like price shopping at that point. So, if you had an ad pop up, and say like hey by the way this is available on Amazon with free shipping, people like , oh well that make sense. Already have my card on file there and I know they’re kept confident put the stuff in a box so; I’ll buy it from them. And that worked well.

DAVID ALADDIN: Amazon just has it so good. Everyone’s advertising, sending traffic, plus emails to them, and just, it’s insane. I know, I’ve never. You know like I’ve never seen a business that pulls that much power ever and it just keeps getting bigger.

ED KOHLER: I think, it’s, the brand benefit comes from a logistics I think where you really can count on them to put something in a box and get it to you in a timely manner and in good shape and you know, if you’re going to start from scratch at some other company, like stuff that I’d buy in online retail, you know, for arbitrage, it’s amazing how pearly it’s pack at times like, Jesus, who thought this is going to be good. You know where, like I’ll buy some health and beauty product and you know like, like it’ll be like a lotion or something, like one of them open up and then, all 36 in the box will get ruined. Just like guys, have you think about this at all? Like so, but, I don’t know. Especially when you get to the holiday’s and stuff. The closer it gets to Christmas, like, this item has to show up in time. But then Amazon is just going to win more, more, and more. Because the last thing someone’s going to do with the last minute is to build relationship with the retailer they’ve never heard of him take a risk on a Christmas present. So, like I you got to get that logistics right.

DAVID ALADDIN: Total world domination.

ED KOHLER: They’re good at that.

DAVID ALADDIN: I’m hoping for Wal-Mart to pull in to, pull some weight just, so all my eggs are in a basket. One of my competitors actually has a hundred retailers carrying their products. And I was very surprised that they’re really pull such weight in such a short time, so. That’s definitely an option to go into, you know. Get into retail stores.

ED KOHLER: Have you done any for fulfillment dues, don’t you do any fulfillment yourself, or use third party fulfillment or just an Amazon displayer?

DAVID ALADDIN: Sort of walked into it. There’s a 3PL that does fulfillment and they’re charging like $20 pallet per month and there’s always other fees for receiving and distributing. So reluctant because it takes a lot of margin out of the end product and then so I’ve been fulfilling from my house for Wal-Mart. I’ve heard of people doing fulfillment through Amazon to Wal-Mart customers, such. I don’t want to risk that channel right now. It’s a good channel.

ED KOHLER: Yes, I think before you address it to Wal-Mart were I don’t ship from. It’s going to be written in the tracking number like…

DAVID ALADDIN:Oh, I understand.

ED KOHLER: I don’t think a customer would care that something shows in an Amazon box. They got what they wanted, who cares. If anything, it probably be more difficult to do the other way like if someone’s bought to you on Amazon and you shipped it to them in a Wal-Mart, Wal-Mart as a brand is somewhat polarizing. Like, there, you know. There are people love Wal-Mart but there’s someone that really hate Wal-Mart. I don’t think anyone really hates Amazon same way like…

DAVID ALADDIN: Certainly, a Wal-Mart box?

ED KOHLER: Yeah. Yeah. I’ve think about that sometimes like if I’m just like putting on an eBay order in the mail and I’m just shipping it with some random boxes that are still in my office. If I have a choice between Amazon box or a Wal-Mart box, I’ll go with the Amazon box. No one, not eBay customer would ever complain about the box but I think, I don’t know. I think as far as just the brands go, Wal-Mart, it has higher negatives. It has very, very high positives, but the people who don’t like Wal-Mart really don’t like it.

DAVID ALADDIN: You bring up a very good points. It’s all like perceive brand value. Something that, if you’re doing privately, something we’ve got to grow and not be the Wal-Mart brand and be the Amazon brand, because there’s a huge distinction. The Amazons boxes higher perceived value, why would you want a Wal-Mart? Please don’t listen to this Wal-Mart. It’s like, they’ll kill me.

ED KOHLER: Well, it something that I’m sure they are working on. Like, it’s very [inaudible] I think but, I don’t know.

DAVID ALADDIN: Yeah

ED KOHLER: I looked at third party fulfillment simply because I’m in the Mid-West and It’s nice that I’m in a centrally located location but the same problem, there’s nobody around here. So when I’m shipping orders the number that are going on the Eastern West Coast or Texas’s you know 80% of orders it’s where everybody lives. So, I’ve looked at spinning up a third party fulfillment like in New Jersey or in Southern California and also tends to be closer to some of the places I resource from but I’ve started to experiment in two, with Merchant Fulfill Prime and I don’t know if you had the chance to try that but I can turn on Prime for products that I’m selling or ship it myself which is cool except you really have to be get it to people in two days, you know whatever the time line is, which in the Mid-West kind of be tricky.

You know if there’s a major city so that could be a problem like in Tulsa, Mexico or something like that, then they start to get more challenging but if I, they do let you originally gate the prime offer, so I could say I’m only going to offer Prime for stuff in the upper Mid-West, so like as far as Ohio and Missouri or something like that. Or the Dakota’s but if I had the products sitting on you know the east Coast, I could say, all right, I’ll do Prime for East and Upper Asia. And then I see if Ministry calls to people you can ship stuff you know first class or other types of really reasonable rates and you know get it into people in two days because you know it’s not just going very far. You know, I mean, I think probably why Amazon’s able to do what they’re doing so they have a warehouse within you know X number of hours of anyone’s house at this point so they don’t have to spend a lot on shipping to fulfill all those orders.

DAVID ALADDIN: I’m telling you, they got the full monopoly on this gig and it’s just emerging into an e-Commerce that’s just about to explode. It is exploding right now but it’s the beginning of it.

ED KOHLER: Yeah and you know, I had got a friend. She, like Target is up here and headquarters is in Minneapolis, and that friend of mine who works at Target, she was telling me that her and her husband, using their shared Amazon account, like they place orders throughout the day and then the orders will arrive in one box, you know, even though the orders where placed at separate times. She’s like, Target is years away from being able to do that. It’s like, yeah, it makes sense, once it’s gone out the door yet may as well bundle them up. You know, queue orders. Ship Station can do that for 45 bucks a month. But, you know.

DAVID ALADDIN: We’re talking about the existing functionality that they have right now. I mean it’s, it’s what are they working on right now, you know.

ED KOHLER: You know…

DAVID ALADDIN: Their vow of fulfillment.

ED KOHLER: You know, they actually, they just opened a new fulfillment center here in Minneapolis in Shakopee, a suburb here. And they built a, they’re opening an office in downtown Minneapolis, Amazon is, but its specifically for logistics. I thought it would have been more related to sourcing products and merchandizing or things like that just because they could probably share their pick of people in Target, and Best Buys, in General Mills and some of the big kind of players in that kind of space up here. But it’s a Logistics Office, I went to the roll-out of this opening in this office and they’re showing like what they’re doing in warehouses now where one that was, I’ve never seen before was, they’re using augmented reality to get pickers up to speed faster.

DAVID ALADDIN: Wow.

ED KOHLER: When they’re picking orders. So, first they have the robots, you’ve probably seen that one. Like the robot, it will bring the shelf to the picker so the picker doesn’t have to run around all day. Where people used to complain that they had to run like 12 miles a day while they’re picking orders, well now they could just get to stand in a cage all day, they don’t have to move because the shelf comes to them but what they’re finding is, it just still takes people a while to really get in the flow so they give them these Augmented reality glasses and it’ll you know, the item like comes off the conveyor. They’d know what that item is. They know how much that item weighs and what size of box it goes in so it’s like this item goes to box A1, okay.

Now, and then the glasses will like point down to them, like here’s where the A1 box is. So, it guides their hand basically by like turning the light on in their glasses. And then I think the machine could automatically dispense the appropriate amount of tape for an A1 box so you don’t have to think about that and you know kicks off the label for him.

DAVID ALADDIN: It’s crazy.

ED KOHLER: Yeah. So, they haven’t fully automated it but the learning curve is low to get someone to speed on that for the little mountain would need a human touch an order.

DAVID ALADDIN: The last step is eliminating the human part. I’ve watched videos of actual machine pickers, to, so where the machine picks the item from distinguishing between different objects and then different sizes then being able to put it in the box that would probably affect our FBA, Fulfillment very massively, they cut their entire labor force which would suck all the FBA employees but…

ED KOHLER: Truly. I wanted to…

DAVID ALADDIN: Oh, it’s moving definitely.

ED KOHLER: Oh, yeah. I learned—one thing I wonder if they would do is like sometimes retailers will just have [inaudible] pack on something, you know. We need this baggage in a certain type of retail from the display. I’m going to put this on the store in Best Buy. Like, it needs to be in a clamshell because it’s going to get too damaged if you do something else, whatever but what if Amazon went to suppliers and said, we want you to prepackaged stuff in boxes, Amazon boxes because we learned over time that when people buy this product they only buy one unit like, so we’re just going to have it ready-to-go, so then we can just store the ship ready boxes and then just slap the label on it like we don’t need the packet because you know, it’ll just arrive in our warehouses pre-packed. It might be one way they could…

DAVID ALADDIN: That is actually pretty interestingly new.

ED KOHLER: Even take a step out of things just you know, off, stop that work on the supplier.

DAVID ALADDIN: I remember I was talking to a guest on the show, and she said everything is going to be 3D printed from our houses. So when someone orders a product, you printed it out for the customer, versus keeping all this inventory because it’s insane how much inventory you have to make, you know that revenue stream going. But if you just printed it out as needed. It’s an interesting concept

ED KOHLER: I’m sure it works for some parts. My friend was in the drones. He really prints a lot of his parts when he crashes his drones. I guess a lot of the pieces are just… the models are on line so he just runs another piece real quick.

DAVID ALADDIN: I know we’re getting off topic but, so where do you see your business going on in 2017?

ED KOHLER: Just, let’s say, probably the thing that I was working best on is probably keep working on is just putting more effort into my winners and finding more of them. So, probably the biggest thing that’s really helped me is you know I used to look at, well when I was doing retail arbitrage only it was just finding new stuff, like everyday you’re going to start it from scratch. But then over time, I start to get a little bit more mature about just, hey, a lot of these products are replenish able, why don’t I start there then before I look for anything new, just replenish what has proven to work. And, so that was step in the right direction. But that time I was still looking mostly just based on the number of units I was moving, but now I’m looking at more on like what’s the actual revenue of each of these products so just because something can be replenished it doesn’t mean it should. So like…

DAVID ALADDIN: Exactly.

ED KOHLER: If you look at the selling quotient port in Amazon, you know. There are a lot of things in there than it looks like. Actually I’m just glad that it’s gone. I don’t want to replenish that one. So, but, I think that’s definitely helped so. I think year over year, right now; my gross revenue is down a little bit but my net significantly higher. Like, I might be doing like 50% higher margins than I was a year ago so I’m taking more money home with, you know, more money with less work. I guess. If I get up in the morning and I don’t work on replenishments first, then I’d probably screwed something up because until I get that stuff in stock I don’t really need to go look for new stuff.

DAVID ALADDIN: What’s your morning routine look like?

ED KOHLER: Drop off my kids at day care and then I work for my coffee shop for a few hours. Swing by my office, put a few orders in the mail then in the afternoon I’ll do some sourcing and run, you know. I often watch a webinar or something like that. When I’m at my office I usually have a podcast going so I would listen to something like you. Just do some Amazon related thing while I’m packing orders, or just seeing what’s going on around there. But, it’s yeah, it’s pretty chill.

DAVID ALADDIN: It’s pretty chill.

ED KOHLER: Yeah. My kid’s day care is about 2 miles from my house and then my office is right in between the two so I have to travel around too far to do some of that stuff. Sometimes I’d do some retail arbitrage where I’ll end up over selling on some products that’s just available from like a major retailer. So I’ll queue up some in-store pickups and then just swing by it a store and pick those up and put them on the mail. But because I already have all the data and Ship Station, you know, I can preprint the labels and stuff like that swing by, grab that in-store pickup and put them to mail. I kind of like that because I’ve been paid before and even bought the item so that’s kind of convenient.

DAVID ALADDIN: I’ve been considering getting an office but I love working from home. How will, how did you separate that?

ED KOHLER: Well I don’t, I never sit there and used it as an office. I would never go there to work on my computer. Like I work from a computer from coffee shop or a bar or from the house or anywhere but my office. It just got too big you know I had it in my house first. When I first started in Amazon when I got serious with this stuff was Fit Bits well not with the Fit Bits itself but all the other accessories and it didn’t really took up any room. So I would just kind of do that. You know with a little side room in the house. But, then I moved it to the garage when things start to get bigger and then eventually I had to get out of that space too because I basically lost the car space in the garage and it’s like all right I want to get it back before winter because the garage isn’t heated either. So it’s going to be a problem.

DAVID ALADDIN: Is your wife’s car, too, or no?

ED KOHLER: No, she kept her spot but I’m right next to where hers was. A lot of car burn. So.

DAVID ALADDIN: You know what, I’m sure every seller goes to this phase. I’ve kind of going through. I shipped mostly direct to FBA, so the garages had been saved. But, Ed, it’s been great having you on the show today.

ED KOHLER: And thanks to you…

]]>Today I’ve got an invincible king on the show, coming live is Ed Kohler, who’s 43 years old has been selling on Amazon for 3 years and is now doing 7 digit sales for more than a year. - What you'll learn: -

DAVID ALADDIN: So, can you take us to the beginning before Amazon, where did your journey begin?

ED KOHLER: Well, I guess as far as songs of our line it goes back quite a ways. That should have, I think I’ve set up for eBay at around 10 years ago, so I’ve sold stuff online for least that long. I think that’s a lot more tedious at that time because you’d have an auction closed and then you’d have to wait for a check to arrive in the mail, wait for the check to clear before you ship stuff out so that was pretty slow. But actually back then I also ran a small sporting goods software clothing company, where I’d sell stuff for a cross-country ski racers. I’m up in Minnesota. We have snow and so I built my first website around ’97 and actually I think I built it using the Aishima editing within Office ’97 which is tedious, but you know I learned something from that. But didn’t go into ecommerce in any larger way until recently. But it was still pretty fun at that time.

DAVID ALADDIN: Did you get like www.ski.com, or one of those crazy domain?

ED KOHLER: That would have been awesome, but yeah, I somehow missed the land grab-on on domains. That would have been cool. But actually, the product I sold was pretty fun. It was called the hand, and it was wind proof jockstrap for cross country ski racers because when you’re skiing wearing lycra ski suits and it’s 10 degrees or colder outside, there can be some issues for guys. So this product was four fleece jockstrap. Basically they had like a soft flex shell on top of it so it cut down on the wind. So anyways, it was called the hand because it was black with a white handprint on the front of it. So it made it kind of fun. But I’d get emails from moms of high school cross country skiers saying, can you make this without the handprint on. Yeah, yeah. Of course the kids want it with, because it was cool.

DAVID ALADDIN: So how much did that like retail for?

ED KOHLER: Like 17 bucks.

DAVID ALADDIN: Pretty good.

ED KOHLER: Yeah.

DAVID ALADDIN: It was a one product website?

ED KOHLER: Yeah.

DAVID ALADDIN: That how it started?

ED KOHLER: Yeah. I’m creating a bra. A sports bra called, The Hug.

DAVID ALADDIN: How did you get into that?

ED KOHLER: So, well, when I was into cross country skiers this is like the product to have. And I…

DAVID ALADDIN: Oh.

ED KOHLER: I don’t know. I have always been a little bit unto girls so I called up the guy that, who happen to create the product. He happens to live not too far from me. And I asked him if he wanted someone to be a rep for him because I travel around the country racing a lot. And he said, you know actually, I’d be pleased if you’d buy the company from me. I’ll just sell it to you if you’d like, because it started to come a little bit of a hassle for him so this is before things like [Inaudible] existed and so you’d have like the biggest holiday rushes like red roll on a holidays and so it’s like,]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean1:00:35AS 80: How Brandon built two 6 figure monthly businesses, in under 2 yearshttps://amzsecrets.com/brandon-built-two-6-figure-monthly-businesses-2-years/
Fri, 03 Mar 2017 19:49:32 +0000http://amzsecrets.com/?p=5553https://amzsecrets.com/brandon-built-two-6-figure-monthly-businesses-2-years/#respondhttps://amzsecrets.com/brandon-built-two-6-figure-monthly-businesses-2-years/feed/0Coming live from StarBucks his name is Brandon Young, who has not one, but two amazon businesses that pull over a million dollars yearly. He does cross platform, and is international. In advanced, our audio had some background noise and was not 100% perfect, but the amount of golden nuggets and insights in this episode is invaluable to all amazon sellers and e-commerce sellers.
In this episode, you'll learn:
How to build brands into the future
How to scale your amazon business
How Brandon dealt with multiple amazon suspensions
How persistence is key
Strategies to selling on Amazon
Diversifying your Amazon business into Walmart, Wish, and Wholesale
Many of the ways about navigating an Amazon suspension
Confusion with Amazon suspensions
Our frustration with Amazon suspensions
Growing an Amazon Business to newer heights
And lots more!
DAVID ALADDIN: Great to have you on the show, Brandon!
BRANDON YOUNG: Yeah, thanks for having me, I appreciate it! It’s a little bit of an awkward day, because, you know, Fridays what I do is I take my son down to school in Miami and I usually work remotely down there, but today he had the day off because we have a few doctor appointments, so he’s hang out with me.
DAVID ALADDIN: Very cool!
BRANDON'S SON: Hi!
DAVID ALADDIN: How is it going? So, you are live from Hollywood, Florida or Hollywood, California?
BRANDON YOUNG: Hollywood, Florida!
DAVID ALADDIN: Very cool! I am from Naples by the way. Can you take us to the beginning, before your first company? Where did your journey begin?
BRANDON YOUNG: Well, I mean… So, for the few years before I started ecommerce and online, I was doing consulting for startups, so I would help people that had ideas formulate those ideas into viable businesses. So, a buddy of mine actually reached out, said that he wanted to get started with a business, leave his job. He had some job insecurity issues and told me that he was very interested in doing the Amazon thing. We had a couple of buddies that were doing Amazon and doing really well for, you know, previous year or two. And so, you know, the two of us started looking into it, I started doing some research and we would share some ideas back and forth. And they were doing retail arbitrage stuff.
At that time I, you know, I was looking at more of a way to make it a sustainable business and scale it rather than, you know, doing retail arbitrage. Just simply because, to me, RA is more of a job than a business, if you are not out there sourcing and you are not home processing things, then you are, you know, you are not making money. And so, I started looking at wholesale, liquidation, private label. I realized that private labels are a little bit further down the growth curve, but we started pretty much with liquidation and, you know, finding some sources. We get a little bit of online retail arbitrage.
We reached out to some brands. I used some of my previous contacts within the, you know, an industry that my parents had a business when I was growing up to reach directly out to manufactures and directly to suppliers and seeing whatever their own margins are. And so we started growing the business from there. So, that was about July of 2015.
DAVID ALADDIN: Oh, very cool! So, two years into this, right?
BRANDON YOUNG: Yeah, not even two full years into it now. And at the time I was, you know, dating my now wife (poor Audio) actually from China. When we were looking at the private label side everyone was like: China, China, China! You know, to quote Trump, right? And so, we decided to start looking at what connection we could make there with the strength of having her on the team. So, we went to China last April, we went to fairs, we went to electronic trade shows in Hong Kong, we spent about a month there. We visited factories for couple of weeks in Shenzhen, Guangzhou and Dongguan. And we decided to pull the trigger on launching o...Coming live from StarBucks his name is Brandon Young, who has not one, but two amazon businesses that pull over a million dollars yearly. He does cross platform, and is international. In advanced, our audio had some background noise and was not 100% perfect, but the amount of golden nuggets and insights in this episode is invaluable to all amazon sellers and e-commerce sellers.

In this episode, you’ll learn:

How to build brands into the future

How to scale your amazon business

How Brandon dealt with multiple amazon suspensions

How persistence is key

Strategies to selling on Amazon

Diversifying your Amazon business into Walmart, Wish, and Wholesale

Many of the ways about navigating an Amazon suspension

Confusion with Amazon suspensions

Our frustration with Amazon suspensions

Growing an Amazon Business to newer heights

And lots more!

DAVID ALADDIN: Great to have you on the show, Brandon!

BRANDON YOUNG: Yeah, thanks for having me, I appreciate it! It’s a little bit of an awkward day, because, you know, Fridays what I do is I take my son down to school in Miami and I usually work remotely down there, but today he had the day off because we have a few doctor appointments, so he’s hang out with me.

DAVID ALADDIN: Very cool!

BRANDON’S SON: Hi!

DAVID ALADDIN: How is it going? So, you are live from Hollywood, Florida or Hollywood, California?

BRANDON YOUNG: Hollywood, Florida!

DAVID ALADDIN: Very cool! I am from Naples by the way. Can you take us to the beginning, before your first company? Where did your journey begin?

BRANDON YOUNG: Well, I mean… So, for the few years before I started ecommerce and online, I was doing consulting for startups, so I would help people that had ideas formulate those ideas into viable businesses. So, a buddy of mine actually reached out, said that he wanted to get started with a business, leave his job. He had some job insecurity issues and told me that he was very interested in doing the Amazon thing. We had a couple of buddies that were doing Amazon and doing really well for, you know, previous year or two. And so, you know, the two of us started looking into it, I started doing some research and we would share some ideas back and forth. And they were doing retail arbitrage stuff.

At that time I, you know, I was looking at more of a way to make it a sustainable business and scale it rather than, you know, doing retail arbitrage. Just simply because, to me, RA is more of a job than a business, if you are not out there sourcing and you are not home processing things, then you are, you know, you are not making money. And so, I started looking at wholesale, liquidation, private label. I realized that private labels are a little bit further down the growth curve, but we started pretty much with liquidation and, you know, finding some sources. We get a little bit of online retail arbitrage.

We reached out to some brands. I used some of my previous contacts within the, you know, an industry that my parents had a business when I was growing up to reach directly out to manufactures and directly to suppliers and seeing whatever their own margins are. And so we started growing the business from there. So, that was about July of 2015.

DAVID ALADDIN: Oh, very cool! So, two years into this, right?

BRANDON YOUNG: Yeah, not even two full years into it now. And at the time I was, you know, dating my now wife (poor Audio) actually from China. When we were looking at the private label side everyone was like: China, China, China! You know, to quote Trump, right? And so, we decided to start looking at what connection we could make there with the strength of having her on the team. So, we went to China last April, we went to fairs, we went to electronic trade shows in Hong Kong, we spent about a month there. We visited factories for couple of weeks in Shenzhen, Guangzhou and Dongguan. And we decided to pull the trigger on launching our first two products and creating a brand. And since then we’ve got two brands, we are launching a third brand, we’ve got about 15 different products and we’re launching five or six more in the next two months.

DAVID ALADDIN: Holy cow!

BRANDON YOUNG: Yeah, the private label accounts are doing, you know, a hundred and fifty thousand a month and growing. We just got into Europe, so we don’t even know the impact fully of that yet. Our first shipment actually lands in Europe next week.

DAVID ALADDIN: Great!

BRANDON YOUNG: Yeah, man!

DAVID ALADDIN: So, there’s a lot going on! You guys are straight hustling! It’s only been two years and you’ve got two brands and you are launching another. Why do you guys want to launch multiple brands rather than one brand a multiple it?

BRANDON YOUNG: Well, so, we’ve have one electronics brand and then we have a toy brand. And so, we usually…It’s just for different verticals. When you have a different niche you don’t want necessarily electronics brand to be, you know on a toy brand. Plus insulates, it helps with future growth. Like, we are thinking ahead, so we are already thinking about, you know, big box retailers and opportunities. So, we’ve got exclusivity on a couple of our products. We are working with our manufactures. We are doing, you know, ODM at this point. Originally we started with stuff straight out of the factory and just putting our stamp on it. And now we are starting to work with the factories to modify it, to make it ours and get exclusivity on different designs. And so the advantage would be…if we can show, let’s say best five for example that we’ve got one of the best selling products in out category and we’ve got great reviews, and we can prove that demand through Amazon, it makes it a lot easier for us to have that conversation with them about getting into their store. And so we are thinking ahead along those lines already.

DAVID ALADDIN: But…So, I am like in a similar situation. Like, I’ve had exporting retail reach out to me, but I’ve got this major issue, lost my products, or all of my products were labeled for Amazon, there are not labeled for UPC code. What do you guys…Like, what’s your plan there?

BRANDON YOUNG: Oh, so that’s a simple fix. You just register with the GS1 and then you get to your UPC on there and you create a unique GS1 UPC. You have your factory start putting that on there instead of your Amazon if it’s going to be for that and… You know, it’s really something. If there’s an order for best buy you have your factory, put the UPC. If it’s for Amazon, you have put your AMZ, right?

DAVID ALADDIN:I see. So, when you go big retail you create specific orders for that retailer. There are other issues too going with a big retailer. The requirements, the certifications that you need as well, you know? Have you had issues like getting two million dollar liability and stuff like that? Dude, these are things that have been coming up and I just don’t know how to navigate the wires!

BRANDON YOUNG: Yeah, I mean, there are probably thousands of people that want to sell you insurance that you know (inaudible) you got to listen to your podcast that might know somebody that want to sell you insurance. So, really, that’s a yellow pages or a Google issue. Don’t know if yellow pages exist anymore, but you can just Google sell me liability insurance.

DAVID ALADDIN: That’s so true! I guess there are a lot of things to do around the business and figuring out what to do and what your priority is the biggest issue. Okay, so, what about funding these external projects? With the big retail boxes they won’t pay you out for sixty days or whatever…

BRANDON YOUNG: So there are cash flow issues there obviously. So, with regards to cash flow issues, I mean, you have options for capitalization. And you know, we’ve been fortunate, you know, we do okay with other investments before we got into this and between my wife and I, we were able pretty much to self-capitalize everything. We’ve had some broker’s issues there because obviously any time you are expanding and growing, starting your own private label, your capital turnover time is a little bit longer. Then let’s say if someone’s doing typical retail arbitrage or wholesale… But usually go a little bit deeper on your inventory you have to give at least 30% in advance. So, you are looking at maybe a two months cycle under capital versus, you know, maybe a two to three weeks cycle on a whole sale account retail where you can just go pick something up, send it in and sold, right? So, some solutions that we know of, I mean… If you’ve got proven records, there are lenders out there that specialize in lending to Amazon sellers. I am trying… I can’t remember the name of hand, but I remember one that would help you with daily payouts. They just keep you… They take 1% of whatever they give you. And they’ll give you up to 80% of what your accounts receivable is at the time. So, that way, you don’t have to wait two weeks for your money from Amazon, that’s one solution. Another would be like a cabbage which would just be a lender.

DAVID ALADDIN: Those guys are like loan sharks by the way.

BRANDON YOUNG: Cabbage, yeah… Sometimes it’s expensive to grow and you have to kind of weight against what your opportunity is. The margins that we are seeing… I mean, Amazon’s really like a gold rush, it’s incredible. Like, where else can you take capital and make, you know, 25% on your money inside 30days? And really, that’s… Really, I would say that’s pretty average for an Amazon seller if you are doing it right. If you are running out of capital and you’ve spent every dollar you have every two weeks, every months, then you are doing a good job.

DAVID ALADDIN: So, you are slightly different than some of the sellers that I’ve talked to. It seems like you are well diversified, you don’t have cash flow issues at all. Can you discuss some of the…how did you get to this point before . . . ?

BRANDON YOUNG: So, before we were doing liquidation, we started with wholesale at that time as well… So, it’s not that we didn’t have cash flow issues. It’s just that we had a certain amount of capital and we were just investing as much of it as possible every two weeks. So, we would just put two sources, or three sources that we had at that time, we would try to manage the inventory, make sure that we constantly had inventory… So, it was a little bit of a balancing act. I am sure that people go through that on different scales. Our just happened to be where we started with, you know, seventy-five thousand or a hundred thousand dollars rather than the typical person who might say: let me give Amazon a try with ten thousand, or fifteen, or five thousand, you know? But it is a curve. I know. I am friends with a guy on Facebook that does Amazon who left his job. I met him when I first started. I joined a few Facebook groups and became Derek’s friend. I don’t know if he listens to your podcast, but I am meeting him in Vegas for the first time at Prosper, going to buy him some drinks and hang out. But I’ve seen him grow, because he does retail arbitrage and he’s growing into a wholesale, and he was working full-time while doing it for maybe the first whole year that I knew him. But we would have weekly hangouts, like group hangouts, with a few different guys. These guys were doing a lot of different things that I was doing, but I was learning from them a little bit more about the processing and the backend of Amazon. And I’ll diverse a little bit here.

From every Amazon seller there’s, we all share maybe 20% of what we do, because we are dealing with Amazon, right? And that 20%, that’s really important for us to discuss and learn from each other. The other 80% might be unique to us, it might be our own business model, it might be our sourcing, where we are sourcing, you know, what we are buying, what we are selling, right? But that 20% is the goal. That’s where you can improve your business. It’s how to properly deal with Amazon, get your shipments right, you know, get that supply chain tidier, lower your cost across the board, those things. So, that’s kind of what I was learning how to do for the first year with these guys when I was, you know, when I was sitting at home.

These are the guys that had been doing it for years and they have learned so many tricks and tips, and had come across so many issues that, you know, everyone comes across with Amazon that I may not have come across yet, that I have finally came across and they have already dealt with it. So, now I am in a group on Amazon for million dollars sellers where you have to…it’s verified, you take screenshots with your account and your face in the picture and stuff. And to me, that’s the most helpful group I’ve ever been in. The guys are very open, they talk about what everyone’s been asking questions and if you ask a question you’ll have ten people chime in and offer advice.

That type of community is really, really cool and it helps, it helps a lot. And most of the guys if you are doing a million dollars, you’ve expanded beyond Amazon or you’ve gone international or you are experiencing a lot of the same things that I am going through and so we are all kind of in the same boat at that point. It’s really, really a neat environment and a cool community. But, you know, to see people start with $5000 like Derek did, and then go from 5000 to growing his business and I see him every two weeks, he pulls his money in cash, it’s just something he does… Yeah, it’s weird. He takes out like 30, 40, 50 thousand dollars in cash and then puts it next to his gun and says: all in, you know. And I just love seeing that! But I’m just like: you are crazy, man! Like, he lives in Detroit, like he’s going to get shot!

DAVID ALADDIN: I have never been on a farm and on a countryside, and he’s got like his rosters and then the gun on the wooden table, owns cash… Very cool! Okay, so, I guess when you start accumulating so much cash every two weeks, there’s been like a lot of suspensions going on. Does that worry you? I hear a lot of Amazon seller get suspended these days for all sorts of reasons…

BRANDON YOUNG: Yeah, so, we’ve been suspended. So, our first…it seems that happened in fourth quarter. So, let’s say we, we started I guess July of 2015, so, that first fourth quarter for us… Yeah, not last year, the year before. So, November of 2015 we got suspended. And we were down for over two weeks. At the time, we already scaled up. We were doing it for less than six months and we were doing about 50 to 60 thousand dollars a month in revenue. And it hurt! It was… We were ramping up for fourth quarter, we were out there and for black Friday I had plans to spend, you know, probably 25.000. And really fourth quarter is the only time that I do retail arbitrage, and even then it was like something where I wasn’t doing it too much. I was already getting off of it and more on the wholesale and liquidation side.

But for fourth quarter, I mean, it makes sense to do retail arbitrage, especially when you have black Friday and things. So, I had plans to spend 25.000, but my account was down and I didn’t know what was going on. I’d never gone through that before. And so I had a contact through one of the groups, and I still owe him for this, but Bryan reached out to me and he’s like: look, this happens, I’ve been through it, it sucks, but, you know, this is what you do. And I’d submitted my own I guess plan of action which they want you to submit. But I submitted my first plan of action and I didn’t do it properly for whatever reason, you know. They auto kicked it back usually the first time, or the first X times anyway. But I have later learnt that, you know, there are certain things that they want you to have in there, and I think a better understanding now. But Bryan helped me re-write it. It took him even twice to do it and probably the fourth time I submitted I finally got my account back. And I got it back Monday morning which was a cyber Monday…

DAVID ALADDIN: Jezz that was an adventure doing it!

BRANDON YOUNG: Yeah, I had the biggest day I ever had at the time. I think I did almost $12.000 in one day. And I just was so relieved to have my account back, but it scared the living shit of me! And I don’t know if the language…I know it’s a podcast… But at that point…

DAVID ALADDIN: It’s okay.

BRANDON YOUNG: Yeah, at that point we’re like okay, we need to diversify and that’s where we started to really starting to get more serious about private label thinking about other platforms, thinking about international. We opened a second account at that time for the private label specifically. And we wanted to diversify as much as possible, so that if we ever got hit by the suspension bug again, that we wouldn’t absolutely just screech us to a hole and murder us.

DAVID ALADDIN: I can tell it destroyed you. I mean, you even knew little details like it was Monday.

BRANDON YOUNG: I’ll tell you what, man, it’s scary when you go from all these plan you are sitting on dollars and you are projecting out, and even though I was only down for two weeks and you know. And if you look at the revenue I lost, it was probably, you know, probably $30.000 or so, I’ve projected out that my actual loss was probably closer to 40 or $50.000. And that’s because if you take what we didn’t spend on shopping on black Friday, if you take how we didn’t compound our capital after that, you know, it really…it put a big bump in our growth chart. And you know, if you think about the fact that from that point forward we were still spending every dime we can make and compounding it for the next six months/nine months, we had less to spend because of that. And every dollar that I didn’t make that day didn’t compound. So, I think every day that goes bay I probably lose more and more money from that single event. Eventually they’ll catch up, but as I am speaking to you, I am still losing money from that event.

DAVID ALADDIN: Let’s just make the opening statement to Jeff Basis: chill on the suspensions! I’ll get on my knees and beg. But I haven’t met a seller, or I am sure I have, but…that hasn’t gone suspended. And it’s out businesses that are on the line.

BRANDON YOUNG: I’ll tell you what. So, here’s what happened. So, got hit a second time, again in fourth quarter, again on that first account. Luckily our other account was probably doing about the same revenue at the time. We were doing six figures, but…we were doing less. So, we were doing probably 150 on the first account and…I don’t know, about a hundred on the second account. But the account that went down was our bigger account, was our first account again. And reason was from intellectual property rights violation.

So, this is a big topic that a lot of people are dealing with, especially if you do retail arbitrage or the liquidation where you are dealing with known brands. Or even wholesales, like, sometimes if you don’t have the proper agreements when you are doing wholesale, you just…you are buying through distributor and sometimes the brand owner will not know that you have that distribution right yet, and he’ll file the complaint just, you know, randomly. So, we had the complaint in the middle of 2016 and it was from a brand that I wasn’t really selling anymore. So, I was like; oh, whatever, I don’t really care, I never bothered to take off my account. I was either lazy, stupid, or all of the above. And so I had another complaint in October from a different brand, actually was the same brand and they issued like two or three complaint on two or three different ASINs right? So, now I have three or four on my account, but that’s a brand that I am still trying to liquidate, I still have like probably 500 to 1000 pieces of inventory and I am just like maybe across 20 different SKUs.

And I was like: alright, let me reach out to them. Less than a week later, probably at the beginning of October…no, in the middle of October, I got an e-mail from Amazon saying that my account had been suspended, I no longer have my selling privileges because of intellectual property rights violation. And then they listed the e-mails. So, what one of the brands has done is they hired a consulting company out of the UK who was filing all of these complaints against any seller that had their products below a certain price. So, if you are… They said that either you are an authorized seller and you were violating the math agreements, or you are an unauthorized seller and therefore they are just violating you immediately. Now, the thing is I don’t need to be an authorized seller to sell on Amazon.

There are laws that protect me there. What they think is that you are selling inauthentic goods if you are selling below a certain price. So, I immediately get on the phone with the guy in the UK, I e-mailed him, he didn’t get back to me and I get on the phone with him. And I talk to him, and I say: hey, you sent these violations in, what’s your basis? And he told me: it is like…well, you…I just…anyone selling below a certain price based on a 100% on your price. I said: here are my sources and I am buying from these sources, I will send you invoices. And he’s like: okay, I am familiar with those that are no problem, I’ll be out to withdraw it. And I said: every single day I am out I am loosing, you know, $7-10.000 in revenue, you are causing significant financial damage at this point. And so within a few hours he actually had an e-mail sent to Amazon to withdraw the complaint. Now, that’s his end, he’s already caused the damage. But Amazon doesn’t do anything.

So, I e-mail Amazon and I am not even thinking like plan of action at this point, I am thinking: okay, the complaint was A, A was withdrawn, let me e-mail Amazon and tell that it’s been solved, please give me my account back. No responses, or that’s not the proper response, or whatever! So, okay, they want a plan of action. So, the first thing you do in a plan of action is you acknowledge that…what was wrong, what the complaint was. You know, I realized that you suspended my account because of X, right? And then you have to tell them that you are going to fix X or that X has been corrected, and you have to explain why X happened in the first place. And then, you have to explain why X will never happen again, okay? So…

DAVID ALADDIN: I see the complete frustration.

BRANDON YOUNG: Now, it still took me almost three and a half weeks, almost four weeks to get my account back. Again, I didn’t get my account back until cyber Monday at 4pm. Exactly a year later after I got back my account from the previous time! And again, I had the biggest day I have ever had on Amazon!

DAVID ALADDIN: You know, sometimes, I wonder, the amount of stress that it puts, you know, when you are in the situation where your account is completely shut off, you got hundreds of thousands, maybe millions of dollars on the line, and the bigger these things grow, the worst these situations compound as well.

BRANDON YOUNG: Yeah, it’s…it is painful!

DAVID ALADDIN: I forgot, you know, when you are in that situation, you are browsing the forums, and you are looking at similar cases, and there’s million dollar sellers that never get back on. And I guess that’s the biggest feat I have, never getting back on when that nightmare situation happens.

BRANDON YOUNG: So, I reached out… What I did is like about a week into it and like two correspondence again with Amazon with no luck, I reached out to CJ Rosenbaum, who’s the Amazon seller attorney. I was going to go with someone like Cynthia Stine, but because it was a legal matter with intellectual rights, I felt better going with an actual attorney.

DAVID ALADDIN: Yeah, he was on the show.

BRANDON YOUNG: Oh, yeah! Yeah, he’s a really cool guy. I finally met him in Orlando with the T-adviser event and had, you know, had a nice conversation with him. But I hadn’t met him in person or anything before that. But, you know, he wrote something for me and we went back and forth, but they denied his first one. Finally, I don’t know if this had anything to do with it, but I was out in Vegas, I went to Retail Global last September and they had, they had a pretty high up from Amazon there. And so I met with him, he had a table, we were able to converse some. So, I was talking to him about suspensions and I was talking to him about what we’d do in our different accounts and things. And he gave me his card, he was like: if you ever need anything, let me know. And I don’t know why I didn’t think about this sooner, but I was like three weeks into the suspension…like almost four weeks.

DAVID ALADDIN: Three weeks is huge, yeah.

BRANDON YOUNG: Yeah, three and a half weeks into the suspension and I e-mailed him on Friday…no, on Saturday, on the Saturday after Thanksgiving, so before cyber Monday. And I said: you know what, I wouldn’t be reaching out to you if I didn’t have, you know, if I had another option. I’ve hired an attorney, I’ve spent $2500, but I’ve had them withdraw the complaints, really the reason my account is down…there’s no reason my account is down still and it’s just simply because… And Amazon even enacted a new e-mail for these specific complaints. And I e-mailed them with no response. Sent like three different e-mails to that e-mail address…And I am trying to remember what it was, but it was…It will come to me. But it was a specific e-mail address that they have put in place specifically for these types of complaints for the intellectual rights violations or for brand owner violations. But I e-mailed them with no response, so I was just like: look, I wouldn’t be reaching out to you, here’s what happened, here’s my latest plan of action, and I rewrote what CJ did and I added to it, and I was like: look, we are doing a lot of business and it’s fourth quarter, this is killing me and we…you can tell by all of our metrics we’ve never done anything shady or wrong with our customers, our feedbacks are a 100% and you know, we don’t have any math agreements, we didn’t violate any laws or rights, and really were are down for no reason, and please help! Yeah, and so that Monday I am sitting in my car, I dropped off my wife to pick something up somewhere, and I am sitting there, and I am going through my e-mails, and e-mail pops up that says: your account is back! So, I don’t know… And then like, I don’t know, ten minutes later as I am getting that e-mail and I am reading it, and I am almost in tears, I am so happy, I am just like: oh, my God! Our business! It’s a huge relief it is back! Whatever… My wife gets back in the car and I am talking, and I show her and I am just like: yeah, we are back, our business is back. And I was like: I wonder if my e-mail to this gentleman had anything to do with it, whether he reached out on my behalf or anything, and I was like: maybe I should e-mail him and let him know m account is back. And she’s like: well, if he didn’t do anything, it’s going to be a little awkward, right? And I am like: I don’t know. And then, less than 10minutes later I see his e-mail comes in and he’s like: hey, I just reached out to this department, they said they are working on it.

DAVID ALADDIN: For real? That’s awesome!

BRANDON YOUNG: So, apparently he got the ball rolling, or he had them bring special attention to my account and they were able to see that you know, I did deserve to get my account back, and it was back. And it’s funny because three weeks later I finally get an e-mail back from that same service that they put in place for this specific reason, saying that my account…or that my request was denied and that…for whatever reason. So, like I was already back and running for three weeks in the middle of fourth quarter, but that same department within Amazon denied me again, three weeks later.

DAVID ALADDIN: I’d feel a lot of time talking about this subject, but it’s probably…I think it’s the biggest subject that faces all Amazon sellers. Yeah, we can solve it. But how long can we suffer for it? And because all of us have been suspended, it seems like no one is strong…you know, can avoid this kind of situation.

BRANDON YOUNG: No, no one is beyond reproach when it comes to Amazon. It’s their ball, their field, they don’t…like, you are really nothing. I mean, you can be doing ten million dollars a year and they won’t think twice about getting rid of you. So, as long as you constantly have that in the back of your mind and you know to diversify… Again, you know, that’s one thing that I would stress to people: do it legally, like Amazon will allow you to have more than one account, and play by the rules. You know, like even if you play by the rules, you can get hit like we did. You know, there are going to be things where you mess up in the beginning. Your account is going to get some strikes on it. You are going to mess up when you first start on Amazon. And either you are going to send things in that you didn’t grade properly, or maybe you bought something and you didn’t realize it was missing pieces, and someone is going to complaint you sold them something used as new, and you are going to get these marks in your account, and it’s going to happen. You are going to send all new products that you manufacture, and you still going to get someone say that you sent them the used one somehow, and you are going to have to defend yourself. But regardless on whether you are on the right, and whether you did it, it’s going to be a black mark on your account. So, know that in advance.

My biggest recommendation to sellers would be to request a second account for the purpose of selling a different vertical, create brands in that vertical, never mingle the accounts, get new bank accounts, get a new business, get a new ISP. I am serious when I say I have ComCast and ATNT in my office, I have two different ISPs internet service providers. I have two different computers that never log into the other account, they are only dedicated to each account. I have a cellphone that’s only dedicated, I have T-mobile with four lines, and one is specifically for one account, one is specifically for the other account, and then I have two personal lines with my wife.

So, plan ahead, understand that you need to diversify, get different accounts and then also diversify into the private label, diversify into wholesale, diversify into Europe, look at getting into other markets like Walmart, Jet you know, eBay. Don’t put all of your eggs in one basket, because it’s going to happen. If you are an Amazon, you will be suspended at some point.

DAVID ALADDIN: I want to go back and watch that last like 20seconds you just said, because there’s a lot of awesome golden nuggets. When you separated your accounts completely, did you also use like a different address or…? Because your both computers are both with the same address…

BRANDON YOUNG: Yeah!

DAVID ALADDIN: Okay, so everything is completely separate?

BRANDON YOUNG: We have a different business address I rent. I actually rent an executive suit at an office building where I get all of my returns sent. It is my business address. That’s where I go and pick up my mail, and pick up my returns, and that is the mailing address for that business. And it cost money. I mean, you have to invest and understand. But you know what? It’s the greatest thing we’ve ever done! I mean, we wouldn’t have survived last year through the fourth quarter if we hadn’t. And now that account does more than my wholesale account. And it’s by a lot. And it’s going to continue to grow because, like I said, I mean we are working on third brand, we are working on Europe, we are launching, you know, two to three new products every single months is our goal, and we are very aggressive. I mean, I’ve got… My wife and I, we’ll do this full-time, and we’ve got two full-time employees and a part-time employee. So, it’s…we are growing and scaling a legitimate business.

DAVID ALADDIN: So, are you going to get a new office for the third company?

BRANDON YOUNG: Yeah, so, the brands we are keeping on the same private label account, we are looking at a third, getting up to third account. We would have to get a different executive suit, a virtual office somewhere. We would have to open up another bank account, another business. And you know, talking about that, we are going to do taxes a third time and having to…there’s a lot of expenses involved in that, so… At this point we are not looking at the third account.

DAVID ALADDIN: No, I think it’s smart!

BRANDON YOUNG: But it’s… Yeah! Within six months I would say we’ll be there.

DAVID ALADDIN: Wow! That’s an insane amount of upload. You got to build your feedback up to that account. Everything is completely new. All the profile work…

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DAVID ALADDIN: I love talking about diversification because I think it is an extremely important topic. So, you are in Walmart now … how is that diversified?

BRANDON YOUNG: So, what we use … so it is funny because when I was at Retail Global that is when we really started looking at diversifying and SellerCloud was out there as one of the presenters and I can’t say enough about Retail Global because it was fantastic, I mean, big shout to them and the biggest thing for me where all of the … they have some great courses and different tracks in learning and stuff and you can definitely learn a lot from that. But the different service providers and software companies and shipping and logistics’ companies, you know, a lot of the different companies that had set up out there were fantastic. I spent one whole afternoon where I skipped a couple different tracks and I went out there with my wife luckily and she was able to see a couple of the conferences and take some notes but while everyone was in and I had the full attention of the vendors, I went around and visited every single vendor – what do you do, let me get you a brochure. Because I had in my mind what we wanted to do with regards to our growth and our strategy and our plans and I knew that I needed help doing that with different providers; I needed a logistics company, I needed someone to help with currency exchange, I needed help with software for cross platforms. SellerCloud was out there and I met the owner, he happened to be out there, the actual guy that owns and started the company and so I set up a call with him afterwards, we talked and it was the solution that we went with just because it was more affordable than some of the other solutions that were out there. I will tell you what, the UI on it is a little rough, it is a hassle to navigate, I hope that they improve that but it gets the job done. We are able to sell on Walmart, we are able to sell on Jet and they have dozens of other market places as solutions that they offer to you but right now, we will be just stuck with Walmart and Jet and we do Wish … we fulfill on wish.com, we do all the fulfillment ourselves through merchant fulfillment, not through our 3PL?

DAVID ALADDIN: What was the software that used to get onto Jet?

BRANDON YOUNG: SellerCloud.

DAVID ALADDIN: Okay. I had some major issues getting onto Jet, I mean, I got approved and everything but just didn’t work well.

BRANDON YOUNGH: It is all through API which is like … I don’t know, I don’t know how that company is worth anything and how anyone bought it, I can’t believe Walmart bought it. It is a horrible, horrible service.

DAVID ALADDIN: They are worried about Amazon, the only thing they can do right now because they are falling behind it.

BRANDON YOUNG: I will tell you what, my other venture what we are investing in and I know it is a lot of what we are doing and how we are growing but I have been able to start to … my wife handles a lot of the day-to-day and then I have my employees so, my background with being in tech development and startup development, one of my passions. What I have been able to do is invest with one of my old clients and friends in a company that does live video technology, I will talk to you a little bit about this on chat, right, will that …

DAVID ALADDIN: Yeah.

BRANDON YOUNG: So, one of the things that we are actually creating is a retail market place that incorporates live video. So, we are coming after Jet, we are coming after Walmart and Amazon but we are going to incorporate where you can actually see the sales people and the vendors live and interact with them live so it is going to be … we are going to try and disrupt that space a little bit. I don’t know how Jet is in business to begin with but they won’t be when we are done.

DAVID ALADDIN: Do you guys have an app name for that?

BRANDON YOUNG: The tentative name right now is Shopr; my partner absolutely hates and despises dropping letters from names and it is so 2008 but so it is a tentative name but for right now, that is what we are going with.

DAVID ALADDIN: That is funny. I feel like I don’t even know how you got all this done in two years because I kind of started at the same time and I am full time at what I do and I don’t have this much … I mean I feel like I am not even comparably close to how many accomplishments you have knocked out. I mean, you have got … you went to three fairs, you went to China, there are a lot of stuff going on. How do you organize yourself?

BRANDON YOUNG: So I mean, it is … I will tell you what, from the beginning I have thought of this on this kind of scale – that is the difference, I think. I think a lot of people are like … if you are looking a foot ahead of you and you continue to walk forward, you are going to get there eventually but I was thinking, you know, I was thinking a mile down the road from the beginning.

Our six month and our one year plan were laid out two months into starting this business and it really made a difference because everything that we did was working towards that end and I think, I look back at my friends and my buddy that I originally had this conversation with and we started at the same exact time, he is doing fantastic, I mean, he is doing a hundred thousand dollars a month but he is still doing retail arbitrage, he is still doing online arbitrage. And he has an employee that is shopping for him and he has got another employee that processes for him and he shops all day and so he has scaled his business up in a way that you can with arbitrage and it is a different path. I mean, there are dozens of ways you can make money on Amazon and everyone has their own method; some people don’t want to have a million dollar business.

There are people … like my margins on my wholesale account might be half of what people are doing on their arbitrage account so they could be doing half the business and making as much money and they are happy with that, right. So I mean, on my wholesale account if I am making in that margin of 12 to 15%, I am happy but the volume I am doing is 6 figures so, you know, to me that is my goal and I am doing higher in products and things like that but some people don’t want that, you know. Some people want … they don’t want the headache of dealing with that, they don’t want to hire an employee, they don’t want to create an actual business, they are okay doing 40 – 50.000 dollars a month with 25% margins. I am thinking a little different than them, I am trying to run the world so …

DAVID ALADDIN: We have got about eight minutes left but I have got a ton of questions. I appreciate you coming on the show. When did you get your first employee and why did you decide to get it at that time? What amount of cash flow did you have at that time?

BRANDON YOUNG: So, pretty early on, you know, I brought someone on to help me process and I was working with him and it was like just from my tech background, you know, the startup mentality background I brought someone on and it was like … I was going to vest him with equity as time went on. One of the biggest mistakes that people make when they do a startup with employees is that they will guarantee them equity immediately, they are like “yeah, come on onboard, we are starting up, I can’t afford to pay you a lot so I will make it up in equity” and they will just guarantee them a percentage, right. That is the wrong way to do things because what happens is 99% of the time it is going to be the wrong person that you need to really get to the next level or you are going to have a clash or they need to leave, there is a conflict, it just doesn’t always work out, they realize that is not really what they wanted, whatever. So when they leave, they leave with that equity and they are still going to have a piece of your business and what you need to do is you need to set them up to actually vest that equity over time – “hey, I am going to give you 10% of my business, we are going to grow this business pretty aggressively but you are going to be vested over two or three years so every few months you are going to end up with some of that percentage”.

DAVID ALADDIN: And you have got time to set those contracts up and everything.

BRANDON YOUNG: Yeah, I mean, it is … I have done it before so clients and things so it is pretty easy for me but the whole point was he worked for the first maybe four or five months and he realized that wasn’t for him and it wasn’t working out and so what I ended up doing is he had vested some equity and I just bought him out; I said “no problem”, I gave him a check for 5000 dollars and I hired somebody else. But now that person doesn’t work just for equity, I give them bonuses, I give my employees bonuses, they work hard, I want them vested in it, we are going aggressively on Wish and so developing products on Wish is unique thing and that is a whole other animal. So, they work from home, they work aggressively and they have my business’ best interest to mind because I take care of them and I need to be free to do other things and I can’t be worrying about the little things that need to be done every day and so having good employees is really important.

DAVID ALADDIN: What percentage of your business is Wish vs. Amazon?

BRANDON YOUNG: Well, Wish is something that we only launched when we got back from Retail Global in September so I don’t know, it is only a few months old. We are not doing a ton there, I mean we are only doing like 15 to 20 000 a month to this point.

DAVID ALADDIN: It is not bad.

BRANDON YOUNG: No, I mean, it is growing; for a new venture, it is pretty cool, the margins are nice there. Actually, the margins are really tight there because we have to compete with Chinese sellers, like, 99% of the sellers on Wish are Chinese. They can ship something from China to a customer in the United States cheaper than I can from within the United States. I can’t ship something down the street to my neighbor in an envelope cheaper than they can from China and it is absolutely absurd but the Chinese government will subsidies their mail system, they will subsidies any exports. So, you go on Wish right now and you shop, you will find a ton of things that cost $2 and they are $1 to ship from China, I can’t ship it to you for $3.

DAVID ALADDIN: I get it. Okay. Last question and we are out. You’ve got Wish and Walmart doesn’t allow you to go through Amazon so are you using a 3PL? How are you … that is one of my struggles too?

BRANDON YOUNG: I am going to plead the 5th.

DAVID ALADDIN: Hahahha! I already know the answer to that.

BRANDON YOUNG: I will talk to you about this offline. I know it is against Terms of Service to ship from Amazon and I am just going to leave that at that.

DAVID ALADDIN: Yeah, you got to do what you got to do. But thanks for coming to the show Brandon. It has been a pleasure. Tons of golden nuggets today, I am going to have to re-watch this specially during the diversification of multiple firms, I really liked that part. I appreciate you coming on the show.

BRANDON YOUNG: Yeah man, while you are only right across the coast, if you ever want to come over this way for lunch or something, I mean it is an hour drive, right? I am literally right across Alligator Alley.

DAVID ALADDIN: If you ever want to come across the coast and I will get you a free lunch too.

BRANDON YOUNG: I will be going out to prosper the ASD this month and then I will be going back to China in April so one of the biggest things that I can recommend if people want to get into wholesale, then I think ASD and prosper are good shows to go to. CES was a lot of fun for us, we have been to CES twice now and really, you don’t go to CES to make contacts with manufacturers or with … you know, there are some out there but really what you are going for are ideas because that is where a lot of the major tech companies are going and a lot of the major companies are going to showcase what they are going to be releasing in the next few months throughout the year.

So we go out there and we think “okay, how can we make something that people can use with that product or can we do something similar and get it to market faster or around the same time but cheaper” and add some kind of value proposition to what they are doing so like for example, Belkin might be releasing a product that costs 99$ that does something and maybe we can do something similar for 49$ and still make good money on it. You know, it has been good for us to think along those lines so if anyone is going out to Vegas or whatever, you can always reach out to me and I am happy to meet up for a drink or something.

DAVID ALADDIN: Awesome! Awesome chat! And your app is Shopr with one “r” and no “e”? Is it coming out soon?

BRANDON YOUNG: Well, that is probably three to five months from coming out but we want sellers to get onboard with that sooner like we want to get some commitment so if you are interested in becoming a seller on the app, it is not for everybody. Ideally, the seller is going to be able to be live like basically you are running a show like QBC so we want you to be able to broadcast live and showcase your products and answer questions. Think of it like you are doing a live broadcast like on Facebook Live and you have hundred or thousand people that are there asking you questions about your product and wanting to buy it but they want to see it and they want you to talk about it, answer questions about it. So that is what we are building. So if you think you have a business model or a sales model or your own brand or you want to open up a store like that and can be live, then maybe you are a good fit for what we are doing and definitely reach out to me. We need to get a couple hundred stores for our soft launch.

]]>Coming live from StarBucks his name is Brandon Young, who has not one, but two amazon businesses that pull over a million dollars yearly. He does cross platform, and is international. In advanced, our audio had some background noise and was not 100% p...

In this episode, you'll learn:

* How to build brands into the future
* How to scale your amazon business
* How Brandon dealt with multiple amazon suspensions
* How persistence is key
* Strategies to selling on Amazon
* Diversifying your Amazon business into Walmart, Wish, and Wholesale
* Many of the ways about navigating an Amazon suspension
* Confusion with Amazon suspensions
* Our frustration with Amazon suspensions
* Growing an Amazon Business to newer heights

And lots more!

DAVID ALADDIN: Great to have you on the show, Brandon!

BRANDON YOUNG: Yeah, thanks for having me, I appreciate it! It’s a little bit of an awkward day, because, you know, Fridays what I do is I take my son down to school in Miami and I usually work remotely down there, but today he had the day off because we have a few doctor appointments, so he’s hang out with me.

DAVID ALADDIN: Very cool!

BRANDON'S SON: Hi!

DAVID ALADDIN: How is it going? So, you are live from Hollywood, Florida or Hollywood, California?

BRANDON YOUNG: Hollywood, Florida!

DAVID ALADDIN: Very cool! I am from Naples by the way. Can you take us to the beginning, before your first company? Where did your journey begin?

BRANDON YOUNG: Well, I mean… So, for the few years before I started ecommerce and online, I was doing consulting for startups, so I would help people that had ideas formulate those ideas into viable businesses. So, a buddy of mine actually reached out, said that he wanted to get started with a business, leave his job. He had some job insecurity issues and told me that he was very interested in doing the Amazon thing. We had a couple of buddies that were doing Amazon and doing really well for, you know, previous year or two. And so, you know, the two of us started looking into it, I started doing some research and we would share some ideas back and forth. And they were doing retail arbitrage stuff.

At that time I, you know, I was looking at more of a way to make it a sustainable business and scale it rather than, you know, doing retail arbitrage. Just simply because, to me, RA is more of a job than a business, if you are not out there sourcing and you are not home processing things, then you are, you know, you are not making money. And so, I started looking at wholesale, liquidation, private label. I realized that private labels are a little bit further down the growth curve, but we started pretty much with liquidation and, you know, finding some sources. We get a little bit of online retail arbitrage.

We reached out to some brands. I used some of my previous contacts within the, you know, an industry that my parents had a business when I was growing up to reach directly out to manufactures and directly to suppliers and seeing whatever their own margins are. And so we started growing the business from there. So, that was about July of 2015.

DAVID ALADDIN: Oh, very cool! So, two years into this, right?

BRANDON YOUNG: Yeah, not even two full years into it now. And at the time I was, you know, dating my now wife (poor Audio) actually from China. When we were looking at the private label side everyone was like: China, China, China! You know, to quote Trump, right? And so, we decided to start looking at what connection we could make there w...]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean52:21AS 79: Woocommerce vs Shopify – which is better?https://amzsecrets.com/79-woocommerce-vs-shopify-better/
Tue, 13 Dec 2016 20:44:42 +0000http://amzsecrets.com/?p=5052https://amzsecrets.com/79-woocommerce-vs-shopify-better/#respondhttps://amzsecrets.com/79-woocommerce-vs-shopify-better/feed/0What’s up you invincible Kings! Wondering what is the best e-commerce platform is? For almost a decade, I’ve been building e-commerce sites, platforms, web services, and have often pondered the true answer to this. I’m your host, David Aladdin, and Your listening to episode 79.
As of recently, I’ve come to a solid conclusion as to which is better, woo commerce or Shopify. The best e-commerce platform for physical products is shopify. In this episode, we deep dive into why Shopify best’s woocommerce, and why I think you should use it too.
Woocommerce, oh how much potential you have, yet so much headaches. Woocommerce, is an awesome platform to start an e-commerce store. Don’t get me wrong. It’s core platform is free, recently acquired by Automattic and distributed as a core platform as free.
Shopify is better for physical products....
The first question you ask yourself is…am I selling physical or digital goods? I prefer Woocommerce for digital goods and Shopify for physical goods.
What is Woocomerce?
Woocommerce is has many strengths, including the fact that it easily installs onto Wordpress, an free install-able core operating system to hundreds of thousands of websites on the web today. In addition, wordpress is fully customization, from themes, to plugins and every single aspect of your website.
Out of the box, it comes very polished as well, with reporting, product creation and fairly flexible to work with most WordPress themes.
Not only that, Woocommerce was once the solution I used to power my own e-Commerce site, until I started to realize the major potential flaws and headaches that came with it.
For one, Woocommerce claims its’ free, but most of the functionality exists in plugins that cost on average of $70 to buy, with 1 year of updates. This doesn’t sound like a lot, but when major core areas of your functionality cost $70/year to keep updated, it gets pretty frustrating year after year, buying these upgrades, with fairly glitchy updates.
That’s not to say that you have to pay for the update, but usually when you don’t pay for the upgrade, that core section is unupdated either now not working, preventing a conflict in another area, that is now not working.
Now imagine having 5-10 of these plugins, each $70/year. If you don’t upgrade, you potentially have conflicting plugins, or security vulnerabilities in your site.
Security vulnerabilities is something that scares me deeply with Woocommerce.
When you have the e-commerce portion of your website hosted by wordpress, on a shared or dedicated server, you always have the potential of being hacked. My biggest concern was this. If I automated my fulfilment through my e-commerce wordpress site to my FBA storage, I could potentially be screwed one day if my wordpress site was hacked for whatever reason.
And yes, there are tons of ways to secure your Wordpress site. But in the past decade or so, with all the security plugins like wordfence, ninjasecurity, secure cloud based security, the list is long.., I’ve still been hacked – say it be a wordpress theme glitch, an un-updated plugin from codecanyon. It happens a lot.
Was it me just being lazy? Definitely not. Wordpress has been highly refined over time, but every add on that you have, requires constant updating. It is extremely annoying to see 10 new plugins requiring updates each week, and then checking all of the plugins to get updated.
Wordpress is great but breaks down a lot from updates
If you use wordpress, you know exactly what I mean. Then on top of that, sometimes, if you update all the plugins, you can get the white screen of death, which can just happen as perhaps your server sql database crashed, or something corrupted.
Then there is the issue of some plugins bought from codecanyon which require updates outside of the wordpress plugin directory, thus you need to seperately go and download those plugins seperately, re-write all the code there,What’s up you invincible Kings! Wondering what is the best e-commerce platform is? For almost a decade, I’ve been building e-commerce sites, platforms, web services, and have often pondered the true answer to this. I’m your host, David Aladdin, and Your listening to episode 79.

As of recently, I’ve come to a solid conclusion as to which is better, woo commerce or Shopify. The best e-commerce platform for physical products is shopify. In this episode, we deep dive into why Shopify best’s woocommerce, and why I think you should use it too.

Woocommerce, oh how much potential you have, yet so much headaches. Woocommerce, is an awesome platform to start an e-commerce store. Don’t get me wrong. It’s core platform is free, recently acquired by Automattic and distributed as a core platform as free.

Shopify is better for physical products….

The first question you ask yourself is…am I selling physical or digital goods? I prefer Woocommerce for digital goods and Shopify for physical goods.

What is Woocomerce?

Woocommerce is has many strengths, including the fact that it easily installs onto WordPress, an free install-able core operating system to hundreds of thousands of websites on the web today. In addition, wordpress is fully customization, from themes, to plugins and every single aspect of your website.

Out of the box, it comes very polished as well, with reporting, product creation and fairly flexible to work with most WordPress themes.

Not only that, Woocommerce was once the solution I used to power my own e-Commerce site, until I started to realize the major potential flaws and headaches that came with it.

For one, Woocommerce claims its’ free, but most of the functionality exists in plugins that cost on average of $70 to buy, with 1 year of updates. This doesn’t sound like a lot, but when major core areas of your functionality cost $70/year to keep updated, it gets pretty frustrating year after year, buying these upgrades, with fairly glitchy updates.

That’s not to say that you have to pay for the update, but usually when you don’t pay for the upgrade, that core section is unupdated either now not working, preventing a conflict in another area, that is now not working.

Now imagine having 5-10 of these plugins, each $70/year. If you don’t upgrade, you potentially have conflicting plugins, or security vulnerabilities in your site.

Security vulnerabilities is something that scares me deeply with Woocommerce.

When you have the e-commerce portion of your website hosted by wordpress, on a shared or dedicated server, you always have the potential of being hacked. My biggest concern was this. If I automated my fulfilment through my e-commerce wordpress site to my FBA storage, I could potentially be screwed one day if my wordpress site was hacked for whatever reason.

And yes, there are tons of ways to secure your WordPress site. But in the past decade or so, with all the security plugins like wordfence, ninjasecurity, secure cloud based security, the list is long.., I’ve still been hacked – say it be a wordpress theme glitch, an un-updated plugin from codecanyon. It happens a lot.

Was it me just being lazy? Definitely not. WordPress has been highly refined over time, but every add on that you have, requires constant updating. It is extremely annoying to see 10 new plugins requiring updates each week, and then checking all of the plugins to get updated.

WordPress is great but breaks down a lot from updates

If you use wordpress, you know exactly what I mean. Then on top of that, sometimes, if you update all the plugins, you can get the white screen of death, which can just happen as perhaps your server sql database crashed, or something corrupted.

Then there is the issue of some plugins bought from codecanyon which require updates outside of the wordpress plugin directory, thus you need to seperately go and download those plugins seperately, re-write all the code there, and continue business as usual.

Now this is just for plugins. Themes require updates too. And even then, a security flaw may leave your WordPress installation vulnerable. If a hacker was able to get into your WordPress e-commerce site fullfilled by Amazon, they could essential create a purchase order for 1000 units, and now you have a major nightmare on your hands.

Hackers could send 1000 units, or 10,000 units of your inventory, and you could be out of a lot of money. And that is why I decided to try out Shopify.

So, even though I had bulletproof website security, there was still a small chance any wordpress site could get hacked, and thus my conquest to discover a better solution began.

Less headaches with Shopify…

5 Months Ago, I tried shopify. Running an e-commerce business is night and day compared to Woocommerce. No longer was I Spending a ton of time updating random plugins with the fear I might get hacked. No longer was I going to woocommerce.com to re-pay licenses for outdated plugins as years went by.

As I entered shopify, there was a design aspect of the dashboard that made building an e-commerce store and launching products the #1 priority. With woocommerce, it felt like they just included the bare minimum so that you’d have to buy their premium plugins year after year.

Upon signing up I realized how simple Shopify took the headache out of e-commerce. It ran faster, product creation was faster. Inventory management was easy but most importantly, the power of shopify lies within it’s developer community.

Shopify’s Apps made Amazon FBA integration Easy

Everything works as expected. Unlike plugins, shopify uses apps to connect to your store. Sort of the same thing, but the installation process was a click of the button. The first app I used created all my Amazon listings in one click into my Shopify store. Literally within 5 minutes of installing, I had 18 product listings created in shopify from Amazon, and my inventory counts were synced as well.

That didn’t take care of fulfillment. I had been using ecomdash to fulfil orders between Amazon to eBay. I had tried to setup ecomdash with FBA to Woocommerce. Problem was, customers were buying stuff on Woocommerce at the time, and ecomdash wasn’t fullfilling these orders. Woocommerce has an annyoing interface between orders pending, paid, fullfilled and shipped. For whatever reason, orders were being paid for but not shipped, a technically glitch I didn’t fully figure out even when using auto-complete orders plugins with woocommerce.

Bleh. Again, these are some of the headaches you deal with when you build on WordPress.

When I installed my ecomdash app to shopify, it completely synced and when orders are placed in Shopify, my FBA inventory is now shipping out to those customers. Everything is now working as expected while diversification of platform and scaling has been further achieved.

Furthermore, my FBA inventory is safer protected behind Shopify than my WordPress installation. Yes, shopifiy itself could get hacked, but that’s way less likely, and their 200,000 fellow users would also be in big trouble too.

Now their app system doesn’t just stop their. Although most their apps are monthly pay based apps, I am much happier to pay 10 dollars a month, without having to individually or group update them, and just focus on scaling my business and adding products.

I don’t want to worry about the security and the functionality of an e-commerce site. With wordpress that was happening every single month, and with Shopify, it runs perfectly.

What if you have WordPress and Woocommerce installed and you wanted to switch to Shopify?

So this is and has been my current situation. I have WordPress installed on the root domain, and shopify on a sub directory, as shop.mydomain.com. By doing so, I’m not messing around with my long existing blog, with hundreds of articles. If I were to change the urls there, it could affect my SEO, and I don’t want to that. So simply put, I kept my traffic driving articles where they are. And I have set it up such that I have wordpress as a bloging platform mixed with shopify as an eCommerce tab. And it’s been working pretty good.

The winner is:

Shopify is better for physical products

Woocommerce is better for digital products.

Shopify does cost a bit more to run, but that’s the price I’m willing to pay for peace of mind.

I’d say it creates a potential for your products to start being seen in retail stores. It could potentially disrupt of all retail. Imagine sending your goods to Amazon FBA. Then Amazon FBA sends their best selling best products “aka” lightning deals and “go deals” to their retail stores. They don’t have to just sell groceries. It’s like when Amazon first started, they went into books. But their now into everything. Adding Amazon Go, is the next step to the puzzle, and they can stock more than a super Walmart can stock, if they wanted to. And this could eventually lead to Amazon Super Go, where they have tens of thousands of products from Amazon in these Amazon Super Go’s across the country. No one thought Walmart could be distrupted. But I also see it as Amazon’s getting back at Walmart for pushing into retail with the Jet acquisition. In 10 years time, retail can look completely different than it looks today. It’s like asking us…what did Amazon look like in 2006. It was completely different. In 10 years… so much has happened.

]]>What’s up you invincible Kings! Wondering what is the best e-commerce platform is? For almost a decade, I’ve been building e-commerce sites, platforms, web services, and have often pondered the true answer to this. I’m your host, David Aladdin,

As of recently, I’ve come to a solid conclusion as to which is better, woo commerce or Shopify. The best e-commerce platform for physical products is shopify. In this episode, we deep dive into why Shopify best’s woocommerce, and why I think you should use it too.

Woocommerce, oh how much potential you have, yet so much headaches. Woocommerce, is an awesome platform to start an e-commerce store. Don’t get me wrong. It’s core platform is free, recently acquired by Automattic and distributed as a core platform as free.
Shopify is better for physical products....
The first question you ask yourself is…am I selling physical or digital goods? I prefer Woocommerce for digital goods and Shopify for physical goods.

What is Woocomerce?

Woocommerce is has many strengths, including the fact that it easily installs onto Wordpress, an free install-able core operating system to hundreds of thousands of websites on the web today. In addition, wordpress is fully customization, from themes, to plugins and every single aspect of your website.

Out of the box, it comes very polished as well, with reporting, product creation and fairly flexible to work with most WordPress themes.

Not only that, Woocommerce was once the solution I used to power my own e-Commerce site, until I started to realize the major potential flaws and headaches that came with it.

For one, Woocommerce claims its’ free, but most of the functionality exists in plugins that cost on average of $70 to buy, with 1 year of updates. This doesn’t sound like a lot, but when major core areas of your functionality cost $70/year to keep updated, it gets pretty frustrating year after year, buying these upgrades, with fairly glitchy updates.

That’s not to say that you have to pay for the update, but usually when you don’t pay for the upgrade, that core section is unupdated either now not working, preventing a conflict in another area, that is now not working.

Now imagine having 5-10 of these plugins, each $70/year. If you don’t upgrade, you potentially have conflicting plugins, or security vulnerabilities in your site.

Security vulnerabilities is something that scares me deeply with Woocommerce.

When you have the e-commerce portion of your website hosted by wordpress, on a shared or dedicated server, you always have the potential of being hacked. My biggest concern was this. If I automated my fulfilment through my e-commerce wordpress site to my FBA storage, I could potentially be screwed one day if my wordpress site was hacked for whatever reason.

And yes, there are tons of ways to secure your Wordpress site. But in the past decade or so, with all the security plugins like wordfence, ninjasecurity, secure cloud based security, the list is long.., I’ve still been hacked – say it be a wordpress theme glitch, an un-updated plugin from codecanyon. It happens a lot.

Was it me just being lazy? Definitely not. Wordpress has been highly refined over time, but every add on that you have, requires constant updating. It is extremely annoying to see 10 new plugins requiring updates each week, and then checking all of the plugins to get updated.
Wordpress is great but breaks down a lot from updates
If you use wordpress, you know exactly what I mean. Then on top of that, sometimes, if you update all the plugins, you can get the white screen of death, which can just happen as perhaps your server sql database crashed, or something corrupted.

]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean18:57AS 78: How Shawn went from Mcdonalds to 100 Million + Sold in e-Commercehttps://amzsecrets.com/78-shawn-went-mcdonalds-100-million-sold-e-commerce/
Sun, 11 Dec 2016 17:58:57 +0000http://amzsecrets.com/?p=5009https://amzsecrets.com/78-shawn-went-mcdonalds-100-million-sold-e-commerce/#respondhttps://amzsecrets.com/78-shawn-went-mcdonalds-100-million-sold-e-commerce/feed/0
In this episode you'll learn:
Shawn's tale of rags to riches
How Shawn went from selling hamburgers at McDonalds to having sold 100 Million + in revenue generated
How to choose a market
How to brand build products
What products to not go for
How to source directly in china?
How Shawn deploys strategies for launching new products
How to use AMS or Amazon Marketing Services and why it's important
Products that Shawn goes for, high and low end
Mistakes and lessons learned from Shawn
Trips Shawn take to China
And all the wisdom I was able to extract out of him within 1 Hour
And lots more!
David Aladdin: Great to have you on show.
Shawn Heart: Hello, how’s it going David nice to meet you.
David Aladdin: Can you take us to the beginning, before your first selling. What happened?
Shawn Heart: I come from a small town, in central Indiana. Decided I was a little bit too lazy to work and too nervous to steal so I had to start business you know, that was the next best thing. So, short story long I started importing fresh cut flowers from South America and selling those literally on the road side you know as a teenager. After school I would just go park my truck on the side of the road and be doing my homework as I was selling flowers for about 6$ a dozen that we imported for 2$ and just fell in love with the idea of creating value and being able to buy and sell. You know back then my marketing strategy was pretty simple. Before I even was introduced to the word marketing, I basically just threw a huge benefit on a road sign that said "Roses ahead. 6$ per dozen" which was unheard of you know, so on strictly on price because back in those days in the early 90's you know, the cheapest flowers you could buy for your wife or girlfriend were about 30 or 40$ a dozen. So 6$ a dozen was like almost too good to be true and that’s really how I got my started in my business world.
David Aladdin: What year was that by the way?
Shawn Heart: That was 1991, somewhere around in there. Yeah.
David Aladdin: I’m guessing, I’m guessing you had a lot of girls wondering where they can flowers with you.
Shawn Heart: Well I was known as the Rose Boy in high school which is not that cool. What happened was, I only had one job David. I got a job when I was 16 years old at McDonalds and you know the reason for the job was to be able to put gas in my car and pay for insurance. So I worked a couple of weeks at McDonalds and had my first pay check and it was 84$ and my brother had just dropped out of school about a month prior to that and my dad said "Look you can even get a job or start a business". So he introduced him to a business where he could buy fresh cut flowers from a local whole seller for about 3$, 3.50$ a dozen and sold them for 6 to 7$ and how we found that.
Every Friday on his way home from the office, he would stop at this old lady who was on the side of the high way selling flowers and just got talking to her and she told him "you know I do this just to supplement my income". So when my brother dropped out of school you know, like I said you can either get a job or start a business. This is my older brother so he said "Ok, I’ll start a business". So he tells him about this flower deal and we are all laughing at him you know, because there was really, my father was the only entrepreneur in my family, he was an independent insurance agent. So everyone was like, you know factory workers living it, the American dream of working for 35 years and retiring with a gold watch and a pension so it was really outside of our normal thinking.
So, you know I’m laughing at my brother as I start my what seemed to, would might be a long career at McDonalds and he comes home that same weekend he had parleyed like a 50$ investment that he started with and ended like 350 bucks you know. Back in the 90's for a teenager in a small town central Indiana that was,

In this episode you’ll learn:

Shawn’s tale of rags to riches

How Shawn went from selling hamburgers at McDonalds to having sold 100 Million + in revenue generated

How to choose a market

How to brand build products

What products to not go for

How to source directly in china?

How Shawn deploys strategies for launching new products

How to use AMS or Amazon Marketing Services and why it’s important

Products that Shawn goes for, high and low end

Mistakes and lessons learned from Shawn

Trips Shawn take to China

And all the wisdom I was able to extract out of him within 1 Hour

And lots more!

David Aladdin: Great to have you on show.

Shawn Heart: Hello, how’s it going David nice to meet you.

David Aladdin: Can you take us to the beginning, before your first selling. What happened?

Shawn Heart: I come from a small town, in central Indiana. Decided I was a little bit too lazy to work and too nervous to steal so I had to start business you know, that was the next best thing. So, short story long I started importing fresh cut flowers from South America and selling those literally on the road side you know as a teenager. After school I would just go park my truck on the side of the road and be doing my homework as I was selling flowers for about 6$ a dozen that we imported for 2$ and just fell in love with the idea of creating value and being able to buy and sell. You know back then my marketing strategy was pretty simple. Before I even was introduced to the word marketing, I basically just threw a huge benefit on a road sign that said “Roses ahead. 6$ per dozen” which was unheard of you know, so on strictly on price because back in those days in the early 90’s you know, the cheapest flowers you could buy for your wife or girlfriend were about 30 or 40$ a dozen. So 6$ a dozen was like almost too good to be true and that’s really how I got my started in my business world.

David Aladdin: What year was that by the way?

Shawn Heart: That was 1991, somewhere around in there. Yeah.

David Aladdin: I’m guessing, I’m guessing you had a lot of girls wondering where they can flowers with you.

Shawn Heart: Well I was known as the Rose Boy in high school which is not that cool. What happened was, I only had one job David. I got a job when I was 16 years old at McDonalds and you know the reason for the job was to be able to put gas in my car and pay for insurance. So I worked a couple of weeks at McDonalds and had my first pay check and it was 84$ and my brother had just dropped out of school about a month prior to that and my dad said “Look you can even get a job or start a business”. So he introduced him to a business where he could buy fresh cut flowers from a local whole seller for about 3$, 3.50$ a dozen and sold them for 6 to 7$ and how we found that.

Every Friday on his way home from the office, he would stop at this old lady who was on the side of the high way selling flowers and just got talking to her and she told him “you know I do this just to supplement my income”. So when my brother dropped out of school you know, like I said you can either get a job or start a business. This is my older brother so he said “Ok, I’ll start a business”. So he tells him about this flower deal and we are all laughing at him you know, because there was really, my father was the only entrepreneur in my family, he was an independent insurance agent. So everyone was like, you know factory workers living it, the American dream of working for 35 years and retiring with a gold watch and a pension so it was really outside of our normal thinking.

So, you know I’m laughing at my brother as I start my what seemed to, would might be a long career at McDonalds and he comes home that same weekend he had parleyed like a 50$ investment that he started with and ended like 350 bucks you know. Back in the 90’s for a teenager in a small town central Indiana that was, as might as well been a million dollars you know, because we just didn’t see that kind of money. So I’m standing there looking at my 84$ McDonalds check and he’s got this big gipsy role of cash you know, it was like more money that I have ever seen in real life and I’m like “Wow! How did you do that?” So, we got talking about it, next thing you know I take my, my little four cylinder Mustang throw a trailer hitch on the back turn it into a truck basically and go out invest my 84$ in roses and you know just fell in love with the business and the idea that I can double my money you know every weekend to certain extent.

So I started hiring my friends to go out and work for me on commission and I figured out pretty quick that you know, if I could share, if I could hire my buddy to go do the same work and give him 50% of the profit then you know, if I had two of those buddies working of it. Then you know I could stay home and do nothing and still make the same amount of money and you know I just had a natural inclination to be, to be lazy so next thing you know I got four or five guys pedaling my stuff for me and one thing led to another. I started doing whole sale and you know and about every Valentine’s Day I’d get hill Billy rich you know because that was a big flower halo day and then I’d retire for about three to four months. So it was a pretty good life as a teenager.

David Aladdin: I Feel like that could be like a CNN headline. From McDonalds to 100 million this is how you do it.

Shawn Heart: Yeah, yeah. It could be. You know I was convinced back then David I was going to be selling fresh cut flowers for my entire life. You know I started my high school classes, I cut it down to like three hours, three classes a day and then I’d go to work you know and I went to high school for like five and half years. Because as I progressed through business, I got more and more interested in business and entrepreneurship versus you know, learning from people that I could actually have on my pay role if I wanted and you know, I got, I think on my senior year I was doing three classes in the morning. I left school like 10:45 and went to work you know to run my business because I was whole selling and you know importing and all that kind of stuff, it was pretty good.

So, that’s, that’s kind of how I got started and then you know early like when I was 19 or 20 or something like that. I got introduced to what is now called Direct Response Marketing you know, back then I got the, the license to sell health insurance you know I’m just a teenage kid you know, that no one really trusted and it was a really hard sell to go out there to older folks you know and farmers in my area and expect them to trust me with their financial future you know, selling life insurance and annuities.

So I discovered pretty early that I could sell easier over the phone because over the phone, I could be anybody I wanted to be you know, face to face they know I’m just damn teenage kid you know so what I developed was, with my father who was an insurance agent we did direct response marketing where we actually hung these signs all over, like we put up 45 hundred signs over a months’ time all over central Indiana that basically was a benefit with a call to action it said simply “lowest cost health insurance and a toll free number” and we were actually selling insurance over the phone way before Geico and Progressive and all those guys all state. They would dial in and we were just comparing apples to apples.

Give me your benefits, what are you paying for premium, here’s what we can offer you, I’ll mail you an application, you sign it and it submit it. It was pretty good business. So I learned how to sell remotely side and seen and that was really the game changer for me.

David Aladdin: How did direct marketing work for you? Did you get like how many inquires did you guys tend to get like just out of curiosity.

Shawn Heart: Oh men. It’s hard to say but thinking back we had probably at the peak we had about four people taking calls and basically they would just sort through the calls and be like, name, address, phone number you know. Who you have your insurance with, what are your benefits and how much are you paying. We’ll call you back if we can help you. Ok, because they weren’t allowed to talk about the insurance so to speak because they weren’t license agents, they were just people that we hired to take the phone calls. So we would look at it as agents and go ok we can save this person money and we call you back and hold to,”Hey David here’s what I got for you”. I got you better benefits a lower deductible and I can save you 20% on your premium. Can you do business with me? And you know it was kind of.

David Aladdin: I’m in!

Shawn Heart: I made it almost idiot proof for you couldn’t afford not to buy you know, for a long time we are tracking ourselves there and we were closing 100% of the people that I would go visit with on the phone or in person, because I pre-sold them before I actually made the trip. It was pretty life changing, but I got kind of board with the whole suit and tie system. So I got back into doing physical products except for with my rose business, our products were always perishable. So if I didn’t sell the product you know I would have to eat it, basically. Couldn’t put it back on the rose tree so I started doing you know like, household goods like art, wall art, framed photos oriental rugs, lots of home decor things that could buy from hold sellers in Chicago an what I would do is all week I will whole sell my product to my group of dealers and then on the weekends me and my friends would go out and pedal on the major cities you know, like Indianapolis, Chicago, Cleveland, Louisville, Columbus Ohio, Cincinnati and it was a fun business because you know everywhere I went people knew. I mean they could see that you were making money, I mean we would go, we’d go out on the street corner and literally do you know five, six thousand dollars in sales on a Saturday and every hustler in town knew it and be like “Wow! How can I get involved?” You know, I’m glad you asked David here, here’s my phone number give me a call, and I’ll show you how this works.

And basically I would say “Look, if you want to do what I do, here’s the numbers ok. Bring 10 thousand dollars and a big truck and be here Monday morning” and they’d show up you know we would sell them a load of goods and more so we would teach them how to go out and flip that, those goods for a decent profit and you know, we lost a lot of dealers that go reining or direct but a lot of them stayed loyal for years, I mean they are still part of my network. So, that’s what really forced me to start doing the direct China importing because you know, if I had a direct line with the manufacture and it was private label then you can’t really go around me you know. I mean I dealt with a lot of people and I know there’s some people out there you can give them the keys to the bank and treat them you know, more than fair and you know like when I’m in the t-shirt business. I was importing t-shirts and having them printed in Chicago and people would literally rather go buy a cotton farm and cut me out, you know make their own t-shirts it was ridiculous.

So, people if you give them a chance to disappoint you they will every time, so you have to try to control your market and you know I went into a lots of physical products that we sold through direct response through google adverts or you know, tv info martials, radio adds, newspaper ads and build up you know several, a head full of businesses over a ten year period and finally you know, I made my first million dollars cash that I could call mine when I was 27 years old and that was in 2003 and that, I mean it wasn’t really a milestone that sticks out to me, I mean it’s something to people are always interested in but what it did for me David was just open up a lot more doors. Because you know with that money you can use to leverage whatever other possibilities you have in your network and just kind of grow from there.

So we grew that into several different companies, I mean the last one I sold 2011 I mean we were doing 25/26 million dollars a year in sales and our last year I ended up selling out to private equity but back then you know I would develop the product, I would import the product, I did my own packaging, I did my own marketing, I did my own costumer service, we did credit card processing, order fulfillment, returns you know, costumer returns it was nuts. So when I got out of that I had 80 thousand square foot warehouse and you know seasonally anywhere from 50 to 150 employees. I mean I had 100 phone lines in my building which and today it’s kind of funny because our amazon business we have no telephone.

I mean I can’t pick up the phone and call my office right now, we are doing over a million dollars in sales. That’s pretty profound if you think about it.

David Aladdin: Solid, yeah.

Shawn Heart: Yeah, so I mean of course I can call someone’s cellphone but, so when I got out of that I swore I was like “I am never going to do fulfillment, I’m never going to do costume service, and I’m not going to have a call center anymore. I’m just going to you know, the next deal I do is just going to be you know either consulting or just kind of an arms link type equity partner. So that’s why I was telling you before we started the interview. When I see in Amazon it was no brainer for me because I had access to all the physical products you could ever want. I mean I can literally buy anything that you can dream of and I can buy it direct because I have inroads in China and I have a heck of a network over there of people that I worked with over the years.

So when I see something on amazon I’d be like, “Wow, this person is really killing it with this product. It’s easy for me I can go out there and buy a cheaper than you can and if I apply a little bit of marketing effort to the Amazon platform, Then I can outsell you”. And then when I was told, it was brought to my attention that Amazon does costumer service. They do all the fulfillment, they do the credit card processing, returns the whole nine yard I was like “Wow! This is a dream come true” so, that’s what drag me out of retirement.

David Aladdin: yeah, I got tons of questions now. So…

Shawn Heart: Alright.

David Aladdin: I feel like when you were selling flowers, you would have kind of pivoted into kind of like those 1-800 flowers companies. You know where they sell direct to like houses like nationwide. But instead you had these hustlers that where pedaling like going direct to the source so that’s why you went to China. That’s funny.

Shawn Heart: Well yeah. At that point we were importing from South America, Columbia but you know the flower business kind of dried up because I’m not sure. How old are you anyhow?

David Aladdin: I’m 29.

Shawn Heart: Ok, how young are you? OH you are 29 ok.

David Aladdin: I’m Pilipino so I look young yeah.

Shawn Heart: Ok. At 29 you probably don’t remember this transition then but it happens over and over again even before Amazon. Like now when someone kicks off a product on Amazon like the little cozies we were talking about or the insulated tumblers the same thing happens. People see that opportunity and there’s actually no barrier to entry there, I mean at this point you can literally go to Walmart and buy it for eight bucks and sell it, put your own label on it or something. So back when I was doing flowers they were 30 to 40$ a dozen and 60 to 70 on the holidays.

So, the flourish shops had the monopoly on the market you know they basically had it seemed up. But soon after I started my business, started making money with that it become more and more known. Not because of me but just because the industry changed that flowers were really not that expensive and now as you were my age you know when I was a teenager they were 40 bucks. When you were a teenager you probably don’t remember a time that you could not go to Walmart or your local grocery store and buy, walk in the door and you get a dozen roses for six or seven dollars, I mean they are there every day right?. It wasn’t like that when I was growing up. It was like this super high dollar commodity that was hard to find and hard to buy.

So you know the industry changed and a long with a lot of products that I was involved in and as you know we chatted there for a little bit I said “Walmart used to keep all the sealers and hustlers honest. Well now that Walmart is Amazon” Now the first thing you do, when you are out trying to sell a product at a trade show or something. You show the product everybody pulls out their smartphones and like “oh I can’t compete with that, it’s, you want 25$ whole sells. On Amazon for 32”. You know what I mean.

David Aladdin: It a different world, yeah.

Shawn Heart: Yeah, much different world. So just being flexible and being able adjust to those changes in industry you know, keeps me in the game I guess.

David Aladdin: So in 1991 you started 12 years later in 2003, you hit your first million and then 2011 you sold your company. How much did you sell it for?

Shawn Heart: Well the, I think the no compete you know all that ran out in September so it was like a five year deal so I can tell you.

David Aladdin: Sweat.

Shawn Heart: It was sold for 13.5 million.

David Aladdin: Nice. That’s a bout of reinvestment you got. I meant capital or re-invest too.

Shawn Heart: Well I started that business with 30 thousand dollars out of my pocket and the first year we did nine million in sales. Actually the first year consisted of four months, so I started that business like in August and it was a seasonal business. The product only sold in the fourth quarter. So in that first year we did nine million in the second year we did like 19 million the third year we did like 27 million and then I ended up selling out in the fourth year. So it was pretty good, I made a few good decisions, had many blessings a lot of people taking care of me and had a pretty decent network so, that was actually the second time I sold the business for those types of figures so it was, it was not so much a revelation but it was a relief because I don’t know if you have ever went through an acquisition like that but once you get that you know, that check in your pocket you know, it’s kind of like. It’s almost like a drug, somebody says “Here’s a check for 11 million dollars” The next thing you want to do, you just want to do it and again and again so.

So we started our Amazon business with the whole idea you know creating these high value brands using the Amazon platform because it’s simple right. I mean a lot of people that just started on Amazon don’t realize how simple it is but you and I can assure you that I’ve had the warehouse I’ve had the call centers, I’ve had all the employees, I know that Amazon is. You know, even though they take about a third of your money when it’s all set and done they deserve it because that’s a part of the business that you don’t want to be in and they just made it super simple for me so.

All I have to do now is go and find products that people want to buy, give them a better option, launch them on Amazon build a brand up until we believe its mature and then sell it to someone else who can take it too the next level and that’s our whole business model.

David Aladdin: So simple, like.

Shawn Heart: Yeah, it really.

David Aladdin: You know you say it so simple like, “OH yeah, it’s just add products Amazon and sell it for like 13 million and then boom”.

Shawn Heart: Yeah, we try to keep it simple. I was actually talking to one of my clients that I do coaching for this morning and he is in the middle of a deal right now. His aim on business does just north of two million dollars per month. He only has one product line in about four, five different sues and he’s got an offer on the table for 6.5 million. I mean he’s two years into it. There’s no other business that I’m aware of that I’ve been exposed to that you can do those types of numbers.

David Aladdin: What do you think he should do?

Shawn Heart: He’s has already signed the deal to sell it.

David Aladdin: I think, I think I would to. Just because the competition, you just never know what’s going to happen in two days. You can have like 10 sellers selling, selling a similar product.

Shawn Heart: Its funny because I was, I actually had another he wasn’t part of my, he wasn’t in my coaching but he was actually just friend you know, that I met through a conference and he was in the middle for an acquisition for 10 million dollars for his aim on business and got sued you know, someone filed a law suit against him class action foursome type of consumer fraud and that killed his deal. So you know like I said, if this guy doesn’t take the deal, tomorrow it could be a different story.

David Aladdin: Exactly. There’s so many variables on selling on Amazon, maybe even e-commerce but Amazon in itself there’s so many things that could happen that would change your business metrics overnight so.

Shawn Heart: Yeah definably. Competition being the main one. We tend to gear more towards ever green products that are really high margin but really high price. Something that, I mean I’m sure you are familiar with like ASM and things like that. But what they have always teacher early on to five or eight thousand people, who knows how many. Was you know, find something small light weight you can fit in your pocket, you can buy it for a dollar and sell it for 12$ and ship it for 30 cents.

Well that’s what 99% of people are doing, they are looking at private label FBA. You know, we, we went a different direction. I mean I literally sell like computer desks, speed bombs, wheel barrels, I mean things that people like “Wow!” you know that’s a lot larger than a loaf of bread and you know, it can’t be shipped by air frat but the thing is for us. We would rather sell one product a day of 500$ than 100 products of 5$. Does that make sense to you David?

David Aladdin: I like it, I like that strategy a lot.

Shawn Heart: And there’s no competition.

David Aladdin: The more I sell on Amazon, the more I realize how much more value it is to sell those more expensive profit margin products.

Shawn Heart: Though they are not sexy or anything like that. It’s not like you know I don’t have the next best mouse trap but the way we look we have over 400 unique products in my physical products business. So I don’t have like that on hero that goes out there and does 500 thousand a month but we have you know it’s still 20% of our products, are still making of 80% of our sales just like anyone else. But all those other sales that we make you know we sell one or two a day make a couple hundred dollars profit on, they add up and we are the only game. I mean nobody is doing that, who wants to go out and invest 20 thousand dollars in one product line you know, and not even knowing if it’s going to be successful.

David Aladdin: Yeah.

Shawn Heart: But once you have done it long enough just like anything else, it becomes more of an art then it is of science. I can look at a product right now and tell you if it’s going to work. I mean I discovered two this morning that’s what I do for our business, my, the scope of my work is to identify new opportunities for our Amazon business, that’s it period. I say “Here buy this”. I send an email, go buy 500 hundred of these tomorrow ad my team builds out the listings and does the launch and everything else.

David Aladdin: There’s a lot of golden nuggets you just mentioned there. The fact that you know your exact focus and then you know the rules of your other team members focus and you are able to just understand that, keep moving the source and pushing products into your line. It allows for a very, very effective business execution.

Shawn Heart: Yeah. I used to have all kinds of funny things to say. Now I just tell them, I do very little and I got a bunch of people helping me. because they don’t understand, I used to say you know when I was doing direct response on google I’d say you know, I do paper clip advertising you know, and for a long time all my friends thought I sold paper clips. I mean they don’t know, they don’t know what paper clip is. You tell people you saw on Amazon they figure you are like an EBay prostitute you know, you go shopping at yard sales. I mean they just don’t know, so I just say look I’m semi- retired I do very little and got six people helping me and then they just look at you like you are stupid. So, that’s the best answer for me or if it’s someone that is halfway intelligent and understand entrepreneurship I just say I do online marketing, simple.

David Aladdin: How have you positioned the six other people in your organization?

Shawn Heart: Well what happened was I discover the Amazon opportunity sort of accidently because I was always a product guy like I said and one of the guys in my network called me probably August 2013 just guessing and he said “Hey, I’m talking to this guy that’s doing 50 thousand dollars a month. He is selling products on Amazon” You know and this guy was in Orlando at the time I lived in Indiana. I was like alright, I’ll be there in the morning Bruce or maybe tonight. So I booked a flight you know, I mean that’s what I do. It’s like our whole mantra with our coaching business is “Quick Fast and then Hurry”. I don’t sit around and wait on anything. I just do it. When we made this call, you were like well I was expecting an interview. I was expecting just a telephone conversation so, but we did it. Didn’t we?

David Aladdin: Yeah, I was cool with either one. Everyone is listening now.

Shawn Heart: So I ran out there, met with him in Orlando and this guy showed me. His name was John, bless his heart. He and I don’t get along anymore because we have different value systems and we just didn’t really mash which is really strange for me. I usually get along and love everybody. So, I wish him the best but he just has a different mentality basically he said “Look I find a hot selling product on Amazon. I list a similar product on their listing and you know, I sell it and I’m doing…” He showed me all the stuff he was doing and I’m like “You know John really what you are doing is illegal because what you are selling is not the same thing that they are selling.” He’s like “Well, it looks similar. No one cares” you know like, he was delusional, he was selling counterfeit product and he thought it was real because some guy in China told him that, they just brought it out the back door. So, I just don’t like to associate with people like that. I wish him the best but we just don’t think alike.

So long story short I went home…

David: It was an ethics issue.

Shawn Heart: Yeah, I mean. I just have something fundamentally wrong with stealing from other people its intellectual property. So and I have been on the other end of that so many times so I know what it feels like. Si, basically I went home you know and this was like, I’m two years into my second retirement you know, I’m enjoying my family and we are travelling and stuff. But as an entrepreneur you always want to have your finger on the pulse, you want to have something, some kind of game so that you can stay focused or stay, I don’t know sharp or relevant. You know how many old folks you know, you know like these old sales guys that still go around knocking doors and you know, trying to sell vacuum cleaners door to door. I mean people don’t buy like that anymore. I just order my groceries on this cool new ape called Shipped, have you seen it?

David Aladdin: Yeah.

Shawn Heart: It’s amazing.

David Aladdin: One day ship, I think its same day delivery and they use [INUADIBLE] through the AP.

Shawn Heart: It is.

David Aladdin: It’s like the Uber in shipping.

Shawn Heart: Yeah, it is. While we use Amazon prime now but you can’t get fresh groceries like meat and produce. So I just did it for the first time today and I love it so.

David Aladdin: That’s in Tampa.

Shawn Heart: I don’t even know why.

David Aladdin: It’s got to be in Naples.

Shawn Heart: I went off on some kind of tributary there but what the heck were we talking about David?

David Aladdin: We just…

Shawn Heart: My old age man I’m ADD.

David Aladdin: Don’t anything, yeah.

Shawn Heart: yeah. Oh yeah John. So anyway I go back and I’m like “Ok, this is a good opportunity.” This is like we are looking at fourth quarter in the face in 2013 and I don’t look having kids or not but back then, there was this super-hot thing called Loom Band, do you know what that is?

David Aladdin: Alright so the Rainbow Loom was a product that you know they have all these little miniature rubber bands and the kids would as Loom to twist them together and make a bracelet out of it. So I see it on Amazon, its selling for like 18$ it’s not branded it’s just a cheap old product it just says Loom kit you know, no brand 34 sellers if that tells you anything on one listing. So I did a little research and found out I could buy it from some of my people in China for like a buck sixty. No one could compete with me because they were all buying from local hold sellers here in the us. They are paying like 3, 50$, 3, 75$ which is still good mark up. But you know, 17, 18 bucks. So I get like 20 thousand of them on the way and they get here ocean freight just in time to get them launched and I think that first, that first in 2013 my first time on Amazon I launched that product and I did a little over a quarter million dollars in sales you know, in September, in October and I think I sold out November. So, I had other products that I had going to like I was trying to arbitrate thing and all these other stuff so, this kid at the time he was a kid Seth, he actually is my business partner now.

David Aladdin: How old is he?

Shawn Heart: He actually… He is 27 now so, at that time he was like 24 I guess. He emails me, he did internship in my marketing company before I sold out and you know worked, his… My personal assistant and his mother were good friends, so he emailed me or something and said “Hey, I’m looking for a mentor. You know I’m out of college now and I got all this stuff going on but I want to start my entrepreneurship”.

David Aladdin: He’s a hustler.

Shawn Heart: So, Yeah exactly. So I met with him and he turns out, he is a hustler a lot more stable then I was. I was a heathen growing up you know, I didn’t really have anybody tell me what to do. But he come from a very structured, I mean the kid still lived in the house he grew up in you know he was like Brady bunch style you know. He didn’t even move out until he got married.

David Aladdin: It reminds of Wolf of Wall street. Did you see that movie?

Shawn Heart: I did. I love that movie. I’m glad you seen it.

David Aladdin: I was like, I will quit my job right now.

Shawn Heart: Yeah, yeah.

David Aladdin: Let me join you.

Shawn Heart: Exactly. I love that movie. It’s one of my favorite.

David Aladdin: It’s one of my favorites.

Shawn Heart: And I have I have referred to it a lot and people are like “I haven’t seen it”. Well, you are doing yourself a good service. So anyway I’m watching the clock here but.

David Aladdin: Yeah.

Shawn Heart: But Seth he reaches out, so I’m like “Ok, I don’t have anything to do.” and I just started doing this whole thing on amazon. So I met with him at Starbucks and you know, I’ve always been blessed with a nose for opportunity and you know high energy. People call hipper forever, but I’m always while people sit around while talking about doing something I’m doing it you know. So, I’m out there. I got a garage full of products from China, I’m pedaling on Amazon you know, it’s working out pretty god and Seth meets me and you know. Oh that’s what I was going to say so people come to you and would be like “David give me an idea? What I can do for my business? What I can do to start a new company? “And you talk to these people and they do absolutely nothing with it. That’s what I’m used to.

So I sit there and meet with Seth at Starbucks, I buy him you know, five dollars cup of coffee and then I remember who he was, so we just got to talking. It was like you know I’m ashamed to tell you this Seth but what I’m doing right now is I’m selling on Amazon you know, last time this guy seen me you know, I probably had 100 employees we were doing you know a couple hundred thousand dollars a day in sales and he is working in my marketing department literally attaching dollar bills to direct mail pieces to go out. Old school you know, to our customer list.

So, now I’m selling on Amazon which sounds crazy but I gave him a quick thumb nail sketch of what I was doing and he called me that night. He goes “Alright, we need to get back together” I said “Why?” he goes “Well, when I got finished I went back to my cubicle” he worked at Simon Properties at the time, said “I went back to my cubicle and I listed, I created a seller account. I listed something online and it sold. Now I got to go ship it in the morning. So what do I do next?” I’m like “Wow! This is crazy. This kid actually did what I told him to do. I like that”.

So I met with him a couple days later and I said “Here’s what we should do. I see an opportunity here in Amazon but I really don’t want to work this hard. So here’s what I’ll do. We will form a partnership you know our company will be built around selling products on Amazon. You put in 16 hours like I did when I was 24 years old, you manage the company, and you handle everything. I’ll just plug you in with all my resources and my network and my experience and you know we will build the company from therein not going to come to the office every day, you’d be lucky to see me once a week but ill support…”

David Aladdin: Smart, yeah.

Shawn Heart: Yeah. So we did and this where I’m answering your question about getting these six people. So we kicked it off and you know we did real well right from the get go and you know, we didn’t know anything about private label but I accidently discovered it because I had to create a few products that I had. Had to design a listing and I just made up a name, I mean I would literally in those days. I would go in just type in a UPC code and if it didn’t take, I’d just make something up and make something up until, until…

David Aladdin: Interesting.

Shawn Heart: the system finally said “ok, I’ll take it.” You know, just trying to get stuff listed. So, we did like 50 thousand maybe like 30 thousand the first month in January. But you know I met with him, I think this was probably November and that was when I proposed that and he goes “Yeah, I’ll do it.” and I said “Do you got 50 thousand dollars?” He said, “Well no, I just paid off my student loans and data “. So, I said alright. Well I have 100 thousand dollars’ worth of inventories so if you can buy in for half of it, we’ll just wait until January. We sell it down and start our business in January which we did. I did like 30 thousand, 50 thousand, and 70 thousand by March and then we started discovering private label and things just took off from there.

So, first thing we did David was just recruit from within our network you know, friends and family and then they would know people be like “Hey, I know somebody that can build websites”; “Hey I know somebody can do customer service”, that type of stuff. So, now we have seen Seth and myself which I don’t do much but, we have Michael, Shane, Tasha, Zii, Eric and somebody else. So, we have like there’s eight people and you know it’s just kind of you just grow with the over time.

David Aladdin: Let’s talk about China.

Shawn Heart: Ok.

David Aladdin: You travel to China a lot, how often do you go?

Shawn Heart: Well, I go, right now I go twice a year. I used to just go for myself actually and what happened was when we had, when we got our business kicked off at that point and time me hadn’t been going to China. I told you know, I’m not going to China anymore it’s really not a fun exotic place to go anyway. I call it the arm pit of the world. So, I didn’t like going there but the opportunity was available for me to go to build our business because we decided in 2015 we were going to add 350 new products to our Amazon catalogue.

So I booked this trip to China in March 2015 and I told Seth, he was like its really tight wide close to the numbers, been counter or accounting type guy. I was like “look man, I’m 6 foot 6 and half. I don’t fly 18 hours coach, so my ticket is going to be ten grand that’s just, you just will have to live with it” you know and at that point we are doing like, I don’t know four or five hundred thousand dollars a month anyway. So, it was small compare to the whole overall picture. But he is like “Wow! Ten thousand dollar ticket.”

Now this is a kid that never left home until he was like 21 years old. So you know where his head is at and I’m like, “Well yeah its 18 hour flight basically, 14 hours to Tokyo and then on. So its ten grand I was like, but I have an idea.” All these people that we were sharing Amazon opportunity with like we started this local meet up group, just because I wanted everybody to do it because it was so easy.

So I started training all these people in Indianapolis and I was like “here’s what I’ll do. I’ll offer to take four of those people with me and plug them in to what I do and charge them 25 hundred bucks that will pay for my ticket. Fair enough?” Ok, so we did it. Well those four people was like “Bam!” I us sent out an email to like I don’t know about 25 people I had in my network at the time and said “Hey, who wants to go to China with me, I’m going to source new product”. Well everybody wanted to go. So, I picked four people and then, and this was probably like in December of 14 or like January 2015 and over time all the sudden people were like “Hey I got a buddy, who want to go”; “Hey, my wife wants to go”; “My business partner and these two guys” and somebody, next thing you know I got 40 people like 45 people going to China with me and so what we did we kept, we took them over there for three days and basically expose them to the secret market place that, you know I’ve been going too for years buying product, where you can literally look at 80 thousand whole sale stales that are all represented in different factories from all over China and sit done with these people and put in an order to buy small quantity of a product, anywhere from one piece, 50 pieces or 5000 or a whole container load.

Which really opens up a lot of opportunities to the people that understand Amazon, you understand when you add product you make more money. You know, when you add super buyable product that has a high profit margin on Amazon you make more money and you just build your business that way. So, I had all these people there and I really enjoyed being on the ground in China with all these folks because I’m sitting here pouring all this knowledge over the years that I’ve accumulated into these people and I’m watching them go out there and implement all these strategies and there source in product and they are all juiced up over it. You know, which get me more excited.

But what I hated about it was all the logistics to get people on the same page and charging them for the trip and I was uncomfortable with that. So, I partnered up with the marketing group Rapid Crush which I’m sure you’ve heard off. Jason Fladland and, Fladland and I we decided “Hey, Let’s do this together”. Ok. I’ll take care of everything in the Us side, you take care of all the stuff in China and we will split it. So we put the price where it should have been at that point, at five grand a piece you know, we got more of a higher tier person. You know, that was more positioned to grow their business versus someone who is kind of working of their credit card you know. Nothing against those guys but you know, the more you charge for something the higher caliber people you normally get. As far as like business you know.

David Aladdin: Works for the costumers too, you know the products that you see you get different types of costumer based on the price point. But just to interrupt, this is how I actually found Shawn Heart for those tuning i.e. was looking for a way to go to China and I didn’t want to go by myself. I was looking for someone that knew the lands that could direct me right to where I could search for product right away. So I actually might be going in March if people want to go to that. You can also meet as well.

Shawn Heart: You are going.

David Aladdin: What’s up?

Shawn Heart: You are going because I just extended it to you. Now everyone knows. I offered you as eat right next to me so you have to go now.

David Aladdin: Yeah, we will check the calendar and see if the girlfriend is ok with it.

Shawn Heart: We’ll just to rewrite your calendar because it’s going to happen. Because when you are exposed to that opportunity David, it literally like trying to take a drink from an fire hydrate.

David Aladdin: Yeah.

Shawn Heart: You are going to be drowning in opportunities.

David Aladdin: How many products do you guys source you know on that trip?

Shawn Heart: The last time we were there I actually tracked it. I know you software people, you have been tracking it from day one but our group last time. There were 80 some people with us and we, they sourced over 15 hundred unique products in three days.

David Aladdin: Yeah, that solid.

Shawn Heart: Yeah.

David Aladdin: One of the things that I usually, you know.it takes many days to just get that product sent to me and then making sure that product is ok. I think it’s actually the smartest thing to just talk to the vendors like face to face you know. Feel the product and see if it’s a good match and then just make that logical decision at that you know point and like, probably get the best price too.

Shawn Heart: Have you. Are you, you are familiar with Ben Cummings right?

David Aladdin: I’ve heard of him, yeah.

Shawn Heart: This guy, this guy is smart. He does the some type of Amazon like coaching program or something. So he was on my last trip kind of like you are talking about now. He was reluctant I met him in at a conference in Vegas and he is like “I’m never going to China. You have to knock me out and drag me to China”. Well I got that doing a little presentation on the opportunities in china, his wife was like “hey Ben, you are going to china”. So long story short he is with me ok, he’s smart though. Because he took a lot of this video footage of him and I walking through the market place buying products and we spotted three or four opportunities right there together in a rowed up orders.

David Aladdin: Yeah.

Shawn Heart: So, imagine this ok. Right now most people what they do, is they look on amazon they want to look at the best sellers. Then they go like juggle scout or one of your software’s or something, they want to check and see what people are doing. Alright. Which is fine, I mean I never let software make a decision for me but I allow the software to validate something that I think it’s going to work.

David Aladdin: Yeah.

Shawn Heart: And then their next step is to go to Alibaba or MadeinChina.com something like that. See what the price is and then maybe if there, if they have that you know the fortitude to do it. They will order a sample to come you know, you are talking 30 days later they’ll check out the sample maybe they like it maybe they don’t then they lose interest. So here’s what I want you to imagine. Go to a market place that has 80 thousand whole sellers ok, that are all there representing direct manufactures alright. The pricing is good David, don’t get me wrong but it’s not the number one benefit.

The number one benefit is being able to being exposed to all this opportunity and you can, like you say you find this product “Hey, these sunglasses look cool. I think they will sell “you know, you can do your due diligence if you want and all that. But what we train people to do is go find opportunity, use your instinct and then when you get back to the hotel which is literally across the street with high, you know high speed Wi-Fi. Then you can do your due diligence and validate it. But you sit down with this manufacture on the spot, face to face toe to toe you know and not. You know in real person you say “Look, how much is this?” and they will go “Here’s the price” and the price is always shocking you are like “Wow! That’s cheap” but you try not to like jump up and down, grab you pipi right. You try to stay cool and you are like “Ok, what if I buy 5000 pieces” Boom, they just knocked another 20% off and you are like. “Ok, wow! This is an opportunity” and this is when it hits you like, I don’t want anybody else to know about this because this is like my secret honey hole and that’s how I used to look at it and then the guy says “Well what kind of packaging do you want?” and shows you on this wall, “You want this packaging, you want an OPP bag, do you want a gift box, do you want a plane white box? Here’s the price for the box. Here’s the shipping, here’s the manufactory led time. Here’s the shipping time. Here’s you landed cost.” You walk away with a written order ok.

Then you can go back to your hotel and you go “Ok, this makes sense. Let’s go ahead and do it.” so you email me and say Ok, I wanted to submit this purchase order. Where do I send my deposit?” I mean you negotiate your payment terms, you negotiate your price, your packaging, your color all the customization right there on the spot and within minutes you walk away with a sample in hand and the confidence that you already have that product bought at the best available price. And what happens if you go three doors down, you find another manufacturer. He has the same product, he may be 20% cheaper. You just take that purchase order tear it up, throw it away and write a new one. I mean no one’s mad at you and being able to have that opportunity right there in front of you for four days ok.

David Aladdin: Yeah.

Shawn Heart: And the entire market place is organized by commodity. Like this whole floor in this building is only selling claw hammers, in the next isle selling toilet seats, in the isle after that is baby buggies and the horse, you know buggy wipes or whatever and so you look at a map and you are like “Ok, I want to sell kitchen products”. Well you go to building number three, third floor, isle H, I and J and that’s pretty compelling right.

David Aladdin: Yeah, for sure. My mind is just moving right now, really fast trying to think of you know, how many products do I got sourced, how many, how much money I need to have in surplus to figure out how many products I want to source there and just the opportunities that is available you know, with that many products in one spot so.

Shawn Heart: Yeah, well can actually read all about that on. I set up a website about it. It’s called www.yiwuguanxi.com have you been there? Was that how you found me?

David Aladdin: Yeah, I think. It was either YouTube or that.

Shawn Heart: Oh ok.

David Aladdin: I will put that in the show notes as well.

Shawn Heart: Ok. yiu or yiwu which is the name of the city, YIWU and Guanxi just means connections in Chines, G-U-A-N-X-I. www.yiwuguanxi.com you can read my whole story about how it all came about, what I’ve done there. You can see videos and pictures, it’s pretty awesome. I love doing it now because, everybody.David Aladdin: It sounds fun. I think it’s fun. I think it would be fun to network with people. For those tuning in, I’m going to try to get like some type of AMZsecrets discount for people listening. This was not planned at all but.Shawn Heart: Well the problem is David we can only logistically handle 100. . .

David Aladdin: Yeah.

Shawn Heart: Because here’s what we are doing. We pick you up at the airport we take you to your hotel, we are talking about the most foreign of foreign countries here ok.

David Aladdin: Yeah.

Shawn Heart: Nothing is like it is here in the US. But My Guanxi my network in there helped me put this together so we are going bring you into the hotel. The reservations are already made for you in a five star hotel that’s just barely over a year old. You’ll be exposed to all western food so you not have to worry about all that crazy Chinese food and it’s not like the China buffet in Naples trust me.

David Aladdin: I like Chinese food.

Shawn Heart: You won’t like Chinese food in China though because it’s nothing like the china food that you are used to. Anyway, we pair you up with a translator who is actually going actually escort you around the entire time you are there. So, you have that same level of comfort that you would have if you went to Miami or New York to a trade show. So, this person is going to be hand to hand the entire time. English translator for you, so you can sit down, negotiate in real time with manufacturers and suppliers and actually come up with a deal that makes sense for your business and walk away with an order and with the confidence knowing that I’m going to give you all my vendors, all my supplier or my service suppliers, logistics companies, export companies, procurement agents, costumes import agent here in the Us. Everything that you need to walk away basically with 20 year education in three or four days, you’ll have all the same contacts that I have. That’s what’s amazing for people and then when they come back and they are like “Man, I can’t believe I didn’t go with you the first time I had the opportunity”, because honestly David the only thing I regret about going to China is that I didn’t do it when I was very young. I mean I didn’t go until I already had money you know.

David Aladdin: Yeah.

Shawn Heart: And had I done that, when I was coming up. You know when I was a teenager in high school selling roses and thing like that. It would be a totally different world for me right now.David Aladdin: What are the. I feel like 80 thousand square ft. is like a ton of area to cover. What would you recommend people to think about before…?

Shawn Heart: That’s the biggest convention center you have ever been to. Like the Sands in Los Vegas maybe.

David Aladdin: Maybe, I don’t know. That’s a big question. I got to compare everywhere.

Shawn Heart: alright, so let’s think of. You know how big is a football field is?

David Aladdin: Yeah.

Shawn Aladdin: It’s like 50 yards by 100 yards ok. So imagine, ok. A football field times let’s say eight, eight football fields together ok. Alright! That’s one floor of one building.

David Aladdin: Yeah.

Shawn Heart: Stack it five high, ok. So you got eight football fields times five.

David Aladdin: I’ve heard it, yeah. I’ve heard it’s so insanely big.

Shawn Heart: That’s one building and there’s five building. So, there’s no way. You can spend the entire year there and you are not going to cover all the ground. That’s why you need a plan, you need to focus, and you need training. What we do is we bring you in and team you up kind then we give you the training that you need every morning we have a meeting which is like “Here’s your plan you the day” and every evening we have an hour, two hour debriefing.

First hour you will spend in a small group with a mentor that’s been there before. Then the final hour we do Q and A and I give you strategies on how to grow. It’s pretty, it’s a pretty detailed instruction plus you get a training manual you know, we have all you cheat sheets all the stuff that we present on is in the manual, ok. And then you basically, everyone in the market place already knows our group. So, just having that tag that says you are part of urn group you get instant credibility. Because you have talked to buyers before and like “No you just.” You are just a dumb kid you don’t know what you are talking about; you sell on Amazon get out of here”. Well they know my people are for real so you get instant credibility and you know, then you get like I said plugged in all my service suppliers. But enough about that, you know the information about that. Hit me with the Q and A we got seven minutes lefts.

David Aladdin: Yeah, we got five. We have about five minutes left. I was about to say that. Ok. Is there anything that I missed, I know, like I feel we could have gone into so many different things and time went by really quick? Amazon marketing services, I’ve heard you talk about it before versus Amazon seller PBC. I’ve heard Amazon marketing services you need that vendor express account right?

Shawn Heart: Right. Now that’s something David you are going to have to interview my partner about Seth because he manages that on a day to day. Remember what I do for my business, financial support and opportunity seeking. I know just from doing our own coaching and stuff that the MAS is absolutely no brainer and you cannot have a seat at that table unless you either have vendor central or a vendor express account. But every single time that someone that we are trying to help out Seth says “Are you doing AMS?” Amazon Marketing Services, I say “No”. That’s the lowest hanging fruit out there. You absolutely have to pull a trigger on that, because I mean it’s a no brainer its easy free money so. I mean yeah. I mean we can even have a part two of this if you want sometime because. . .

David Aladdin: For sure yeah. I guess just to extend, I don’t know if you know the answer to this. You have to have to sell the product directly whole sale to Amazon in order to advertise AMS wise or?

Shawn Heart: No you don’t.

David Aladdin: You don’t ok.

Shawn Heart: Because we have both. We have several Amazon seller accounts based on different brands. Because you know my whole model is to build a brand and sell it. So we have some accounts that actually have vendor central relationship, where Amazon buys our product and resells. But all of our other accounts just have vendor express. So you don’t actually have to whole sale to Amazon.

David Aladdin: Awesome, that’s one of the biggest questions I have always had. And let’s close out, what are you trying to get from your brand or brands? Wants your close out? Your acquisitioned target?

Shawn Heart: What we try to do is build where it does at least a million dollars or close to. We have one now listed for sale, I think needed 900 thousand so we try to do at least a million dollars in net profit over the trailing 12 months and we try to sell it for three and half time earnings. So for a business it does a million dollars we list it you know for like 3.7 and we will take anywhere 3.2 to 3.5 something like that, depending on the business. If it’s an Ever green product you know like we have a bidding product that we are selling that gets a better multiple because it’s not seasonal. Each one is a little bit different. We have a fitness brand that we are trying to sell, that is being sold at a four times multiple but that business is a little bit premature. I think it trailing 12 months is about 500 thousand in net profit. So we are trying to sell it for two million, so we will see what happens there.

David Aladdin: Who are you guys reaching out to potential investors or are they coming to you?

Shawn Heart: They are coming to us. I have a hand full of brokers that we use when we list a business, depending on what kind of business. Like if it’s a retail arbitrate business it’s different like my friend I told you. Does two million dollars a month that’s a different buyer, that’s a different caliber person. When you get, if you can have a business doing three to four, five million dollars in annual net profits; then you can look more private equity and those types of buyers that are more sophisticated but if you have a business you know its two, three hundred thousand to a million in net profit you are dealing with a lot less sophisticated type of buyer. You need to make financing so there’s, you know it’s a different process and it’s a different costumer.

But I have brokers that I can share with you and your audience, I mean when the time comes I’d like to look at what you are doing and then I can make a suggestion. Not just put a list of them out there you know.

David Aladdin: No, yeah. How about you give us a list in March.

Shawn Heart: I will definitely do that. Hey, guess what just showed up my groceries.

David Aladdin: Awesome. Well anyways Shawn it was awesome to have you on the show. We appreciate you coming on and sharing your expertise and sharing your golden nuggets. Definitely have to get you back on the show and see you in March.

Shawn Heart: Yeah.

]]> - In this episode you'll learn: Shawn's tale of rags to riches How Shawn went from selling hamburgers at McDonalds to having sold 100 Million + in revenue generated How to choose a market How to brand build products

In this episode you'll learn:

* Shawn's tale of rags to riches
* How Shawn went from selling hamburgers at McDonalds to having sold 100 Million + in revenue generated
* How to choose a market
* How to brand build products
* What products to not go for
* How to source directly in china?
* How Shawn deploys strategies for launching new products
* How to use AMS or Amazon Marketing Services and why it's important
* Products that Shawn goes for, high and low end
* Mistakes and lessons learned from Shawn
* Trips Shawn take to China
* And all the wisdom I was able to extract out of him within 1 Hour

And lots more!

David Aladdin: Great to have you on show.

Shawn Heart: Hello, how’s it going David nice to meet you.

David Aladdin: Can you take us to the beginning, before your first selling. What happened?

Shawn Heart: I come from a small town, in central Indiana. Decided I was a little bit too lazy to work and too nervous to steal so I had to start business you know, that was the next best thing. So, short story long I started importing fresh cut flowers from South America and selling those literally on the road side you know as a teenager. After school I would just go park my truck on the side of the road and be doing my homework as I was selling flowers for about 6$ a dozen that we imported for 2$ and just fell in love with the idea of creating value and being able to buy and sell. You know back then my marketing strategy was pretty simple. Before I even was introduced to the word marketing, I basically just threw a huge benefit on a road sign that said "Roses ahead. 6$ per dozen" which was unheard of you know, so on strictly on price because back in those days in the early 90's you know, the cheapest flowers you could buy for your wife or girlfriend were about 30 or 40$ a dozen. So 6$ a dozen was like almost too good to be true and that’s really how I got my started in my business world.

David Aladdin: What year was that by the way?

Shawn Heart: That was 1991, somewhere around in there. Yeah.

David Aladdin: I’m guessing, I’m guessing you had a lot of girls wondering where they can flowers with you.

Shawn Heart: Well I was known as the Rose Boy in high school which is not that cool. What happened was, I only had one job David. I got a job when I was 16 years old at McDonalds and you know the reason for the job was to be able to put gas in my car and pay for insurance. So I worked a couple of weeks at McDonalds and had my first pay check and it was 84$ and my brother had just dropped out of school about a month prior to that and my dad said "Look you can even get a job or start a business". So he introduced him to a business where he could buy fresh cut flowers from a local whole seller for about 3$, 3.50$ a dozen and sold them for 6 to 7$ and how we found that.

Every Friday on his way home from the office, he would stop at this old lady who was on the side of the high way selling flowers and just got talking to her and she told him "you know I do this just to supplement my income". So when my brother dropped out of school you know, like I said you can either get a job or start a business. This is my older brother so he said "Ok, I’ll start a business". So he tells him about this flower deal and we are all laughing at him you know, because there was really, my father was the only entrepreneur in my family, he was an independent insurance agent. So everyone was like, you know factory workers living it, the American dream of working for 35 years and retiring with a gold watch and a pension so it was really outside of our normal thinking.

So,]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean52:32AS 77: My Investor Copied My Business After Meeting – The Real Hijackerhttps://amzsecrets.com/77-investor-copied-business-meeting-real-hijacker/
Tue, 06 Dec 2016 21:16:50 +0000http://amzsecrets.com/?p=4814https://amzsecrets.com/77-investor-copied-business-meeting-real-hijacker/#respondhttps://amzsecrets.com/77-investor-copied-business-meeting-real-hijacker/feed/0Dark times guys. The Potential investor I had talked to back in March ended up copying my business, specifically product that we talked about at a meeting on March 25th. If you go through the amzsecrets blog back in March, you can see specifically when I was meeting with this investor and what happened. This is, unfortunately a true story.
It all started on March 25th. A local investor wanted to acquire my business.
My march 25th post went exactly like this.
We went to a very…very fancy restaurant. Everything was over $25 (for lunch). We were the only ones there. Beautiful restaurant, yet empty lol. “Order anything!” he says. Exactly how you would think these things go down…
So we talk alot about the business. His businesses, mine… etc. He’s a very interesting, very savvy, business guy. Exactly how you’d think he would be like.
Then things get down to business. He’s very interested and sees the potential for expansion.
His request is 66% of the business. 33% for him. 33% for his business partner. And 33% for myself.
In return, I give him a “x” valuation of both perceived combined with actual costs. This “$x” value is not yet finite, and I have not yet thought of number. By paying $x he gets the 66%.
In addition to “$x” he is also guaranteed to fuel the company, providing 2M minimum to fuel growth and accelerate it to brick and motor both in the U.S and overseas.
At which point, he aims to super launch the company to acquisition in 36 months, for an acquisition of 200-300M.
All would be done with teams of lawyers, everything in writing, and paperwork//contracts.
I have yet to determine my valuation of the company, but this is definitely getting interesting. Do I want to sell? No. Would I consider a partner who is extremely savvy in business overseas, well connected with major business players… definitely.
The dinner went well. Then emails preceded. He wanted to essentially steal the business, and bring in new cash. I wanted my multiplier.
Nevertheless, Fast forward 3 weeks ago, 8-9 months after that investor meeting I was browsing Facebook the other day, and I saw picture of a similar product posted by a facebook friend. This girl had liked it, since it was a competing product of mine, I wanted to see what was so likable about that product. I clicked on the photo, nothing big, went to the instragram account of that photo, and I saw a photo of her, one of my other friends, around a table, with the product siting in front of them.
They were having a business meeting about that product. So, this girl, is actually the daughter of the investor, who’s also my friend. I had met the investor through her, we had done previous buisnses together once upon a time. I had built a technology company for him
Two of their products, that was discussed march, was siting on that table in that photo. Their were 4 people photo. I sat down, I looked at it, and I titled it… be better than the competition. It sits on my desktop as an image. I would actually make it my desktop background, but that would probably piss me off too much.
Now, I feel like this is something you only hear in movies. Like Mark Zuckerberg copying Tyler and Cameron Winklevoss on their social network concept except they didn’t have a business launched it was just at idea phase.
When I had met with this investor, I had told him multiple business secrets, products, revenue numbers, inside business secrets that we all have in regards to our own businesses and even inventions I was working on. Theres secrets to selling on Amazon. But theres also business secrets that each one of us have, specific to our business. Some of those were revealed. . I didn’t tell him everything, but I know for fact, it changed the future. He would never have launched that business, and executed on some products that I notice they went into. Speciifcally they launched two products I had mentioned in the meeting. I don’t believe coincidences.
Dark times guys. The Potential investor I had talked to back in March ended up copying my business, specifically product that we talked about at a meeting on March 25th. If you go through the amzsecrets blog back in March, you can see specifically when I was meeting with this investor and what happened. This is, unfortunately a true story.

It all started on March 25th. A local investor wanted to acquire my business.

My march 25th post went exactly like this.

We went to a very…very fancy restaurant. Everything was over $25 (for lunch). We were the only ones there. Beautiful restaurant, yet empty lol. “Order anything!” he says. Exactly how you would think these things go down…

So we talk alot about the business. His businesses, mine… etc. He’s a very interesting, very savvy, business guy. Exactly how you’d think he would be like.

Then things get down to business. He’s very interested and sees the potential for expansion.

His request is 66% of the business. 33% for him. 33% for his business partner. And 33% for myself.

In return, I give him a “x” valuation of both perceived combined with actual costs. This “$x” value is not yet finite, and I have not yet thought of number. By paying $x he gets the 66%.

In addition to “$x” he is also guaranteed to fuel the company, providing 2M minimum to fuel growth and accelerate it to brick and motor both in the U.S and overseas.

At which point, he aims to super launch the company to acquisition in 36 months, for an acquisition of 200-300M.

All would be done with teams of lawyers, everything in writing, and paperwork//contracts.

I have yet to determine my valuation of the company, but this is definitely getting interesting. Do I want to sell? No. Would I consider a partner who is extremely savvy in business overseas, well connected with major business players… definitely.

The dinner went well. Then emails preceded. He wanted to essentially steal the business, and bring in new cash. I wanted my multiplier.

Nevertheless, Fast forward 3 weeks ago, 8-9 months after that investor meeting I was browsing Facebook the other day, and I saw picture of a similar product posted by a facebook friend. This girl had liked it, since it was a competing product of mine, I wanted to see what was so likable about that product. I clicked on the photo, nothing big, went to the instragram account of that photo, and I saw a photo of her, one of my other friends, around a table, with the product siting in front of them.

They were having a business meeting about that product. So, this girl, is actually the daughter of the investor, who’s also my friend. I had met the investor through her, we had done previous buisnses together once upon a time. I had built a technology company for him

Two of their products, that was discussed march, was siting on that table in that photo. Their were 4 people photo. I sat down, I looked at it, and I titled it… be better than the competition. It sits on my desktop as an image. I would actually make it my desktop background, but that would probably piss me off too much.

Now, I feel like this is something you only hear in movies. Like Mark Zuckerberg copying Tyler and Cameron Winklevoss on their social network concept except they didn’t have a business launched it was just at idea phase.

When I had met with this investor, I had told him multiple business secrets, products, revenue numbers, inside business secrets that we all have in regards to our own businesses and even inventions I was working on. Theres secrets to selling on Amazon. But theres also business secrets that each one of us have, specific to our business. Some of those were revealed. . I didn’t tell him everything, but I know for fact, it changed the future. He would never have launched that business, and executed on some products that I notice they went into. Speciifcally they launched two products I had mentioned in the meeting. I don’t believe coincidences.

Funny thing is data is all relevant to time. Products that sold well 1 year ago, do not necessarily sell well a year later, and specifically in this case. Markets get saturated, and only the ones on top, with the most solid reviews, last. Timing has a lot to do with your success. When I launched I was the first to market. No one existed. Today its Definitely saturated. I reaped my investment, and am using the new found capital into new categories, less saturated areas. And that’s a golden nugget. Copying someone today, doesn’t mean you’ll have the success they have. Especially if your not the 1,2,3,4,5 person to market. You’re the 100th.

So in a sense, that’s karma for them. When I see zero ethics comes in, it’s always nice to see the bad guy lose.

Okay, David, how do you know this company copied for a fact your business. One cool thing about domains, is you can look up when a particular domain was bought. I mentioned at the beginning of this Episode, The meeting took place on March 15th. Their domain was purchased 10 days later according to the WHOIS directory. So from the meeting, and within 10 days, a new company domain was purchased. CRAZY.

The golden nugget here, is trust. Every business relationship you ever get into requires an iImmense measure of trust. From investors trying to buy your company, or even customers trusting that you’ll deliver when they purchase your product.

There was a ton I didn’t tell him. But it was enough for him to get started. If I was to do again, I would sign an NDA with him. Well not with him, as his trust is completely blown out of the water. You would never do business with someone if the first thing they said was

So will that other business be successful? I have no idea. Everyone runs businesses differently, and only kings come up on top. I wouldn’t want to be up against myself.

If you guys have related story like this…like getting screwed by an investor, a business partner running away with your business, someone stealing intellectual property, let me know, I’d love to here it.

It’s just one of more annoying parts of doing business. I try to take as much emotion out of business decisions as it allows me to be more calculated. But man, I had done business with this guy for many years. I trusted him. It wasn’t some random investor.

The real issue is…investors can be extremely dangerous. The come in, they have a lot of money, they can recreate the products that you have and employ others to do what your doing. In my case, this happened. Either sell your business or be copied.

Facebook is doing it to SnapChat. This investor did the same
NewsFlash:
http://www.geekwire.com/2016/amazon-puts-new-limit-customer-reviews-no-5-week-except-verified-purchases/
So what does this all mean David? Launching a new product is insanely hard compared before. It’s not the same. Anyone who tells you so, it not telling the truth. I am currently launching 2 products at the moment, and getting them going is so much harder, even with established email lists, it still takes time to get those good reviews.

I like the challenge, but launching hundreds of products a year is not going to work for those types of sellers. The game has changed. And I’m sure they’re rethinking their strategy.

]]>Dark times guys. The Potential investor I had talked to back in March ended up copying my business, specifically product that we talked about at a meeting on March 25th. If you go through the amzsecrets blog back in March,

It all started on March 25th. A local investor wanted to acquire my business.

My march 25th post went exactly like this.

We went to a very…very fancy restaurant. Everything was over $25 (for lunch). We were the only ones there. Beautiful restaurant, yet empty lol. “Order anything!” he says. Exactly how you would think these things go down…

So we talk alot about the business. His businesses, mine… etc. He’s a very interesting, very savvy, business guy. Exactly how you’d think he would be like.

Then things get down to business. He’s very interested and sees the potential for expansion.

His request is 66% of the business. 33% for him. 33% for his business partner. And 33% for myself.

In return, I give him a “x” valuation of both perceived combined with actual costs. This “$x” value is not yet finite, and I have not yet thought of number. By paying $x he gets the 66%.

In addition to “$x” he is also guaranteed to fuel the company, providing 2M minimum to fuel growth and accelerate it to brick and motor both in the U.S and overseas.

At which point, he aims to super launch the company to acquisition in 36 months, for an acquisition of 200-300M.

All would be done with teams of lawyers, everything in writing, and paperwork//contracts.

I have yet to determine my valuation of the company, but this is definitely getting interesting. Do I want to sell? No. Would I consider a partner who is extremely savvy in business overseas, well connected with major business players… definitely.

The dinner went well. Then emails preceded. He wanted to essentially steal the business, and bring in new cash. I wanted my multiplier.

Nevertheless, Fast forward 3 weeks ago, 8-9 months after that investor meeting I was browsing Facebook the other day, and I saw picture of a similar product posted by a facebook friend. This girl had liked it, since it was a competing product of mine, I wanted to see what was so likable about that product. I clicked on the photo, nothing big, went to the instragram account of that photo, and I saw a photo of her, one of my other friends, around a table, with the product siting in front of them.

They were having a business meeting about that product. So, this girl, is actually the daughter of the investor, who’s also my friend. I had met the investor through her, we had done previous buisnses together once upon a time. I had built a technology company for him

Two of their products, that was discussed march, was siting on that table in that photo. Their were 4 people photo. I sat down, I looked at it, and I titled it… be better than the competition. It sits on my desktop as an image. I would actually make it my desktop background, but that would probably piss me off too much.

Now, I feel like this is something you only hear in movies. Like Mark Zuckerberg copying Tyler and Cameron Winklevoss on their social network concept except they didn’t have a business launched it was just at idea phase.

When I had met with this investor, I had told him multiple business secrets, products, revenue numbers, inside business secrets that we all have in regards to our own businesses and even inventions I was working on. Theres secrets to selling on Amazon. But theres also business secrets that each one of us have, specific to our business. Some of those were revealed. . I didn’t tell him everything, but I know for fact,]]>David Aladdin: A fan of The Amazing Seller, Amazon Private Label Podcast, FBA Seller, Amazon, Silent Sales Machine, Richard Branson, Jeff Bezos, Elon Musk, Scott Voelker and you.clean14:31AS 76: How Dan sold 12 Million+ Selling Wholesale Productshttps://amzsecrets.com/76-dan-sold-12-million-selling-wholesale-products/
Tue, 06 Dec 2016 01:21:08 +0000http://amzsecrets.com/?p=4929https://amzsecrets.com/76-dan-sold-12-million-selling-wholesale-products/#respondhttps://amzsecrets.com/76-dan-sold-12-million-selling-wholesale-products/feed/0Today I’ve got an invincible king on the show, Dan Meadors. Dan and his business partner Eric Lambert started selling on Amazon in 2011 using a credit card with a $600 limit and in a short time, sold 12+ Million. He goes through exactly how to sell wholesale.
In this podcast you'll learn:
How to sell on Amazon
How to sell wholesale on Amazon
How to scale your Amazon business
How to buy product
How to decide what products to buy
How to hire employees as you build your business
How to operate your business strategically and make decisions
How to know which products source well on Amazon and which ones do not
How to move from retail arbitrage to a wholesale business
When to get a warehouse
How to choose a business partner
How Dan sold 12 million in wholesale products over the past 4 years.
What not say to new vendors
What is the criteria for the perfect wholesale product
Has brand gating affected affected your ability to sell wholesale
What is the criteria for the perfect wholesale product?
And much more!
David Aladdin: Great to have you on the show Dan?
Dan Meadors: Hey, It is fantastic and I have been mostly watching this show all time?
David Aladdin: Can you tell us in the beginning before your first million when it all start?
Dan Meadors: Well we started out with doing with doing retail arbitrage at the airport, both employed with awesome job actually and we one of our buddies had he was well over six figures and he came and he gave his two weeks’ notice and we just started bugging him like what is going on? Like why are you leaving because in Kentucky six figures salaries is really high salary and he was like no man, he was just like making more money at home selling stuff on Amazon and I was like Are you serious? I said what is this so he took us out to Walmart to show us well what was what he did and this was retail arbitrage and we were doing retail arbitrage at that point and we got over $600 a credit card, actually it was a personal credit card when I was like, it was really strange because I got paid pretty well and I don’t had to have but I didn’t have any credit like I never needed credit for anything like you know I just bought everything I want so when I first got my credit card it was $600 limit and I was like I guess we would see how this work. So we went out and we bought some cool stuff and then we sold it on Amazon and you know it scared us at how fast it sold. We were like well this is really cool. So we went out and we did it again and again and again and about the end of the year. . . that December we had done about $60,000 in sales all from the magical 600 bucks and we decided that hey we if we imagine if we did this full time how much money we can actually do so then we decided to go full time in January 2012
David Aladdin: So, when you guys first started were you guys working at the same place? What were you guys doing?
Dan Meadors: We were working in the internet retail company that sold off it’s website, it sold toys and games like that. . .
David Aladdin: Like similar ecommerce business and then you guys transitioned into your own myth
Dan Meadors: Yeah it was definitely similar and but it was different because that was a really established website and like any manufacturers they wanted their products to be on that website like so they would go you know we got to approach when I was there we got to approach a lot about caring people’s products and as an Amazon seller we don’t get approached very often like hey man when you sell my product on Amazon like there is half of it and it’s more like you reaching out to them and it’s just a different dynamic
David Aladdin: So, 60,000 in the first year between two people and then you guys decided to go and hit it full time.
Dan Meadors: 60,000 in December.
David Aladdin: In December of 2011.
Dan Meadors: We did about a 150,000 total.
Today I’ve got an invincible king on the show, Dan Meadors. Dan and his business partner Eric Lambert started selling on Amazon in 2011 using a credit card with a $600 limit and in a short time, sold 12+ Million. He goes through exactly how to sell wholesale.

In this podcast you’ll learn:

How to sell on Amazon

How to sell wholesale on Amazon

How to scale your Amazon business

How to buy product

How to decide what products to buy

How to hire employees as you build your business

How to operate your business strategically and make decisions

How to know which products source well on Amazon and which ones do not

How to move from retail arbitrage to a wholesale business

When to get a warehouse

How to choose a business partner

How Dan sold 12 million in wholesale products over the past 4 years.

What not say to new vendors

What is the criteria for the perfect wholesale product

Has brand gating affected affected your ability to sell wholesale

What is the criteria for the perfect wholesale product?

And much more!

David Aladdin: Great to have you on the show Dan?

Dan Meadors: Hey, It is fantastic and I have been mostly watching this show all time?

David Aladdin: Can you tell us in the beginning before your first million when it all start?

Dan Meadors: Well we started out with doing with doing retail arbitrage at the airport, both employed with awesome job actually and we one of our buddies had he was well over six figures and he came and he gave his two weeks’ notice and we just started bugging him like what is going on? Like why are you leaving because in Kentucky six figures salaries is really high salary and he was like no man, he was just like making more money at home selling stuff on Amazon and I was like Are you serious? I said what is this so he took us out to Walmart to show us well what was what he did and this was retail arbitrage and we were doing retail arbitrage at that point and we got over $600 a credit card, actually it was a personal credit card when I was like, it was really strange because I got paid pretty well and I don’t had to have but I didn’t have any credit like I never needed credit for anything like you know I just bought everything I want so when I first got my credit card it was $600 limit and I was like I guess we would see how this work. So we went out and we bought some cool stuff and then we sold it on Amazon and you know it scared us at how fast it sold. We were like well this is really cool. So we went out and we did it again and again and again and about the end of the year. . . that December we had done about $60,000 in sales all from the magical 600 bucks and we decided that hey we if we imagine if we did this full time how much money we can actually do so then we decided to go full time in January 2012

David Aladdin: So, when you guys first started were you guys working at the same place? What were you guys doing?

Dan Meadors: We were working in the internet retail company that sold off it’s website, it sold toys and games like that. . .

David Aladdin: Like similar ecommerce business and then you guys transitioned into your own myth

Dan Meadors: Yeah it was definitely similar and but it was different because that was a really established website and like any manufacturers they wanted their products to be on that website like so they would go you know we got to approach when I was there we got to approach a lot about caring people’s products and as an Amazon seller we don’t get approached very often like hey man when you sell my product on Amazon like there is half of it and it’s more like you reaching out to them and it’s just a different dynamic

David Aladdin: So, 60,000 in the first year between two people and then you guys decided to go and hit it full time.

Dan Meadors: 60,000 in December.

David Aladdin: In December of 2011.

Dan Meadors: We did about a 150,000 total.

David Aladdin: Ok, how did you guys, when did you guys get your first million?

Dan Meadors: Um well then, we that year went full time, we did 850,000 in sales and our retail arbitrage, next year we did 940,000, all retail arbitrage an then the following year after that was our first million dollar year. We transitioned this in 2014 and in July we transitioned into wholesale and we did 1.28 million that year and then 2015 we did 3.9 million and then we probably land up around 7 million this year

David Aladdin: Awesome, a lot of people have the hardest time quitting their jobs what was and I know it sounds easy to say now but Eric was just like I am selling on Amazon and it’s pretty good but you must have been pushed over the edge somehow

Dan Meadors: For us I mean, Eric it was really strange, I mean you know it’s kind of a perfect for us, Eric is, he came to work on that job with me for a while like he been there for about 8 months or a year and but before that he been claimed professional poker player for nine years so it wasn’t a big transition for him, he were you know we were both pretty risk taking guys, we believed and you know we had enough evidence that said hey we can make money big in this we just need to have the time to expand it.

David Aladdin: I think it’s got to be something with poker, I love playing poker and I know a few people that went to engineering school that played poker and they don’t do engineer any more, they became entrepreneurs or full time poker player and they have like side gigs going on so there might be like a secret golden nugget that you play poker and your life will change. So, what’s your partnership like is it a 50-50 side.

Dan Meadors: Yeah, we are 50/50

David Aladdin: Very cool. That was like a pretty easy decision to go in

Dan Meadors: Yeah, I mean we were both, we were both, when we started our company we were both equally invested into it like it was an easy decision plus we were like, we both knew we wanted to develop a job that we didn’t wanted to develop a job but we wanted to develop a business and we had a very similar mindset so the decision for us was incredibly easy on our partnership split.

David Aladdin: You guys have employees, you guys have warehouse, when did it start going crazy like.

Dan Meadors: It was in 2014, it was like the very between in 2014 that we, we had a warehouse, we graduated several warehoused in that period but it was in 2014 that we really decided to make a big jump and it was we brought in our first employees in December 2014 and then we brought on our. . . then we moved into our warehouse, our current warehouse in January 2015.

David Aladdin: How big is it by the way?

Dan Meadors: 10,000 square feet.

David Aladdin: Ok and then were you guys doing inventory like a garage before that?

Dan Meadors: No we had our, whenever we started our business the very first day we had a warehouse, Our first warehouse was a 250 square feet, it was more of an office than a warehouse, We moved out there within a couple of months into 5000 square foot location and then we moved into a 3000 square foot location, yeah but no way my wife would let me just pack boxes to a sale in a similar situation, you know we weren’t going to be doing it from the inside of the house.

David Aladdin: Yeah, my girlfriend will be kind of mad at me

Dan Meadors: Right we could have easily done our volume outlets of the house, it was just my mom and wife was not accepting it and it was like you know no you guys are not bringing a bunch of stuff here.

David Aladdin: I’m guessing she’s receptive now though with the number you guys have gained?

Dan Meadors: Yeah, she enjoys it now but it’s, it was a transition for her too, it was a transition from whenever I was being employed to running an Amazon business you know there were no guarantees that we were going to do well, we believed we would do well and we were operating off a pretty setup, we still print out with the same pintables of today and I think that’s what contributed to our success there

David Aladdin: It sounds like you guys have a very solid partnership going on, what types of tips you have like sellers are looking to add partner to their business

Dan Meadors: I mean I have got some tips that will help but for us it didn’t come together like that, we started as a beginning as a partnership like we both, adding a partner is a different dynamic, A lot of we get that question a lot as our partnership is really good. We are really open with each other, we Eric bring something different to the table like he has a different mindset than I do when it comes to how we run our company, like how many types of products we got and things like that. We both are relatively very extreme guys and we settle in what right every time and it really works out well but as far as partnership we believe that the primary thing is that you don’t add a partner because you are lonely, you need to add a partner that brings strategic value to your business like it needs to be more about more than money like you know we get this question a lot like I was looking to get a partner who would get my equity buys, I was like ok what else do they bring.

What else are they brining besides money like what skill set, what doors is he going to open for your business and most people don’t have an answer for that because they don’t having somebody to bounce off ideas is like yeah that’s an important part, having someone bounce off its ideas is an important part but it needs to be you need to moving to some important type of goal if you want your business to grow and in that if you are bringing in a partner, it has to be someone bringing strategic value to business.

David Aladdin: So, let’s dig in deeper there so what are your strategic advantages versus Eric?

Dan Meadors: Eric is more logical in terms of processes, he’s very good in building out processes like because the way he looks at things he, he is logical and he will sit there and analyse the project until he completely understands what is going on in each step of the process so that’s like really important now that we are scaling, super important and also whenever we were buying product , he was a lot more disarming on how what type of product he was buying whereas I was resistant in buying more products like I operated under a different mentality like I operated I do things right majority of the time like I try to make many decisions as possible and with the flood of decisions with the flood of purchases and things like that like inherently will grow because the majority of them were correct.

So there’s a different mentality like he is very process oriented, I am very like I move the business in the wholesale because I knew that we need to make that logical jump, I was the one that pushed to hire employees because it was necessary at that time to scale I know it’s awkward but I tend to be more aggressive to change and he supports that and that’s the great part, he supports my ability to make quick changes and it helps us move and grow quickly.

David Aladdin: I feel like you are trying to say that you are more risk aversive than he is. I feel like he will think like taking the most calculative steps than you will take most of your gut instinct on it. It’s awesome so it’s like the wholesale decision has been paid off, almost doubled between 2015 and 2016. Not that you guys were doubling and tripling.

Dan Meadors: It’s great as far as the decision in movement in the wholesale, there’s a lot more components for us that make wholesale work and as a whole it’s a very scalable system which plays really well in some of our strengths because once we establish like this is what we want our business to do like we want to be able to reach out to these manufacturers, we want to able to get these accounts who carry these types of products like we developed a system to do that’s and it’s about training the employees and working with the employees to have them scale it.

like you don’t need to have domestic employees like we have, we don’t do any outsourcing of our work, we systemize it and we have a team in the Philippines who just get ton and tons of leads all the time and they do all our initial contact to manufacturers, it’s a growing process so what we have done over the past year and a half we created business like honestly David I mean there’s no joke like last week I worked 6 hours.

Every time we started working on this business, we trained our mindset to replace myself in this position, I want to make our employees bigger, better and stronger than I was doing this job. So we focus all of our energy on number one creating system number two building talent that’s better than us.

David Aladdin: There’s a lot there, so let’s go deeper. I noticed that you mentioned the Philippines and you started, let’s start from the beginning, your decision to go wholesale like let’s talk about what made you guys do it and then let’s start there

Dan Meadors: Ok. So there were a couple of components and we did 850,00 sales, 940,000 sales and that was all retail arbitrage and it was like yeah we were making great money because our profit margins were amazing , you know typical retail profit margins but I could literally could not invest any more time like there was no more time to give and so it was like we did a great year and made a few hundred thousand dollars and but is this really what we want to be doing like you know we both let great jobs where we weren’t working as hard as in our own business like literally that just made me a slave literally to my own business so we started brainstorming different scalable models, we were looking from the perspective of this it doesn’t require any more time to do more sales, number 1 wholesale, number 2 private label, number 3 like a closed out style, more aggressive closed out style purchasing model liquidation and we started looking internally at those individual at those models and for us I think private label is a great model.

For us it wasn’t a skill, whenever you started looking at it, there are certain skills at private label like you have to develop packaging, it’s a lot more complex to get your product here than versus ordering domestically. There are more moving parts, you we wanted to take in something that we could train somebody to do it and they would be able to take that position for us. With the closed-out model, there are a lot of benefits to it but it is so cashy to as you are buying big giant amounts of product that you may not sell from 3 to 6 to 9 months. It was like I don’t like that whole much of inventory.

With Liquidation, the margins are huge but there are a lot of problems, it’s just a dirty business you have to go and check if this product is broken or not broken and sale, a lot of issues. So wholesale made a lot of sense to us, number 1 we can create a model where we can train people to do stuff, number 2 we were able to run as late as much as possible which mitigates a lot of risk. And that’s why we settled on wholesale because we could not give more time.

David Aladdin: How many SKU’s you guys launched per month with wholesale?

Dan Meadors: I mean all the product we carry are already established, it is like already established products on Amazon that we carry. With the initial orders we tend to add about 10 to 15 accounts per month right now.

David Aladdin: Right, that would be like work lots faster than private label work I mean you are developing products like 2 to 3 months, it’s a craft to get the perfect product and get it to US

Dan Meadors: At this point we carry about 600 products.

David Aladdin: Very cool and so you guys have been doing this only since 2015 in terms of wholesale and I’m guessing you guys do also private label as well right?

Dan Meadors: We did a couple of private label product, we did actually incredibly well with one of them but it was much more intensive for us, it was like we were operating outside the model we were supposed to be doing and it was like we had to create exceptions in our business to do it and whenever we started looking at that we were like so for us even though this product was incredibly profitable it makes more sense for us to continue doing wholesale because it fits into our model and we don’t have to involve ourselves and the business continues to grow without you know without our time and so we did a few and at that time it was just more time intensive than we spend on wholesale.

Dan Meadors: The products we pick initially, primarily think we care about is velocity like we look at products that we can sell like if not that sell whole and we can sell at least 90 units per month and the reason we do this because that’s a product with great demands like for example there are three or four sellers all competing for the box of the product and suppose it’s 3 and I’m coming onto it and I can sell at least 90 times a month that means a product is selling 360 times a month on Amazon.

There is a great demand for product which mean that it is very unlikely that I am going to be stuck with any inventory like the worst thing that can happen is that I have to take the time of the loss of the product to get rid of it and that’s never reorder like we never buy 30 days’ supply of product so it’s like if that product doesn’t work we will say stand up losing $2 a unit like I lost $180 but whenever a product sticks like in the same scenario I find that product and making $4 a unit profit because it ends up making out perfectly. It’s like that product is going to make me $4 a month for the next 15 months on an average from one of our sales. So $4 per month so look at your return rate, it’s like I am making $360 a month for 15 months on my products.

David Aladdin: Yeah you saw them like in 10 mins of research someone else did. That’s awesome so basically 90 units per month velocity not a lot of FBA sellers selling the same product

Dan Meadors: You know for us is how many competitive sellers there are like let me give an example, like me and you are a product and I’m selling it at $25 in the buyer boxes and you got you price at $35, does it matter you are on that listing like you are never going to get a sale right at $35. So we are only concerned about the people that are in the intention to actually get sales. For the fast math we always do 2% like anybody that would be $25.50 or less we consider competitive and we look at the offers in that range so let’s just say there’s five people priced between $25.00 and $25.50 then that’s the amount of sellers we calculate, we don’t, there could be 500 sellers on that listing as long as the right amount are competitive like we want to sell 90 units per month so like I am not competing with a guy who is selling for $35.00 to be honest.

David Aladdin: It’s awesome so let’s say you found that sweets product for 2% spot and you are good with that product and your decision to find about that vendor, Is there like an easy way to do that, I feel like you have to.

Dan Meadors: I am going to tell you a bigger secret it’s the easiest thing in the world like here is the thing we use our resource modelling right like when we first started doing wholesale we were like, we were looking for wholesalers hoping to find products, we stopped there like it was like finding a needle in hay stack so now we just go and identify awesome products like I told you 90 units per month, look at that product and we go hey I can sell this 90 times a month, I just find who make the product or and that’s where I start so you know with a product it’s made by company X, I google company X and it tells me the contact information, reach out to him and contact him and 9 times they will get back to you and for whatever reason they can sell or can’t sell to you whatever or if they don’t distribute themselves, they will send a list of distributors there that they use to purchase that product.

David Aladdin: Did they ever get the feeling that you are an Amazon seller and

Dan Meadors: We tell him like we use a website that explains our company and it just tells some of the cool stuff that we can do on Amazon to help your product but it’s very clear we are an Amazon seller and that’s like the primary hurdle that most people run into is that a lot of companies don’t want to sell to Amazon sellers like they realize the dynamic of Amazon and they are like I’m selling company X’s product three hundred times a month and you start selling the product, that does not mean it’s going to sell 600 times a month now that we are splitting sales so most companies are starting to realize that.

So they really don’t want to sell to Amazon sellers so what we do is we work with the brains, we don’t treat, I don’t consider myself to be a retailer, I consider myself to be a brand partner like we identify the areas where we can help that company to grow and increase their sales and institute those changes to help their product better on Amazon.

So that’s the way we try to work with them yeah we are an Amazon seller which is way better than everybody else like that’s why you should work with us and most companies were pretty receptive to that probably given the amount of time that we have been doing it and the amount of companies that we are working with now.

It’s very easy to get us accounts but that’s most people drop the ball because they run into their initial no and it’s like ok we will go for another product but whereas we get excited when the company tells us we don’t want to sell the product to us like that makes it high priority because everybody else that’s been coming to them is being turned away and they understand it, I understand that product is going to be really good for a really long time

David Aladdin: Are you guys strictly Amazon distribution or you guys have multiple means, I have a few wholesalers who approach me and they tell about their company and I look at them and they are Amazon sellers privately and I am like I don’t want that wholesaler competing on my private label product but do you guys have plans to sell out of Amazon sector too?

Dan Meadors: We sell on eBay as well but to be honest with you the only reason we sell on eBay is that it makes it convenient not to. It’s a very automated process like if we want to create listings and stuff there is no way, a lot of people go into the thought process that constantly diversify channel and I think they lose focus later

David Aladdin: I said that’s what I was saying to. They say there are not enough sales on eBay, it’s too risky to sell on Amazon but then if you ask them what the channels that sell well are, they just like diversified it.

Dan Meadors: You hear that a lot, it’s too risky to sell on Amazon and it’s ok, think about the statement itself, now you are going to diversify your attention to detail to sell marginally, marginal amounts of products on other channels it’s like if you are paying attention to your Jet sales every hour you are paying attention to your Jet sales, is an hour you are ignoring Amazon and when you are ignoring Amazon that’s when I don’t believe people get suspended for no reason. I believe there are warning signs, there are watching your accounts.

So like we watch our accounts like hawks, instead of trying to make more sales on other channels, I still make sure that my account is fully compliance on Amazon all the time. Like we have one of our virtual assistant and that’s all she does. Like she deals with refunds customer services all those aspects but she checks our return rate on our products to see if there’s an issue, I mean she does every other possible thing like if there’s a change notification she goes and verifies that versus our manufacturers page to make sure the change in accordance to what they would want.

So yeah it works very, very attentive to detail on that aspect of our business because as supposed to diversify we chose to be just better on Amazon, we try to make our self just better all the time.

David Aladdin: NO, I think it’s a wise decision, I have diversified but I don’t see much of sales from other channels and it’s taking a lot of time. So sometimes the best advice is just stick on that one channel and it does really well like it’s not a lie.

Dan Meadors: But if you spend that same time like you just diversified in other channels, if you just spend that same time in improving your listing, improving picture, doing Amazon PPC like do you not believe know that your sales will go up more proportionally than your sales on other channels.

David Aladdin: I don’t know but if you have ever tried launch on Jet, it’s seriously hard, they don’t have a listing dashboard, you have to do through an external dashboard that connects through their API list and then you have to do the Jet runway program it’s insane.

Dan Meadors: I mean we thought about all of this, doing Jet, Walmart like we were accepted on the Walmart platform, we were accepted on the jet but in like Walmart role, it says the price cannot be higher than price on other channels and it’s like now I’m doing Amazon like you have seen the cost for that as I can’t legitimately hold my margins so now I can actually comply with their roles and make our prices the same, I am doing so much work to make less money by selling on that channel and if I don’t like I say I price the products you know including that mark-up for multi-channel fulfilment on Walmart, it’s like now I am just literally breaking the rules.

I am building an armour around my business that is knowingly breaking the rules of the platform, like let me ask you this, like on Jet are your product the same price on Jet as they are on Amazon.

David Aladdin: Well the thing is that they are still in review like for the last six months, I don’t know why. It’s the biggest joke ever. It wasn’t fun doing it, I think I signed up to two subscription services, one to do multi-channel, I don’t use “jello”, I use “ecomdash” and so there is app subscription fee and then apparently, they use subsidiary software, it’s called “listonjet.com” and that’s a subscription fee too, I’m like what’s going on, I just do the process and I am stuck in review because of the jet accusation.

Dan Meadors: Sure, for us that means, we went through this like we need to diversify like what are we doing here like we need to be better what we already do, we need to provide more value to our vendors, we need to add more stores to our line, and just concentrate on growth that way like pay more attention to our account that they are not endangered at any points.

David Aladdin: Have you ever, I guess I have this concern but have you definitely know better but have you ever because there is brand grading on Amazon now and you know there is wholesale products and brand of products do they ever change their mind on wholesale product?

Dan Meadors: Here is the thing we love brand grading like brand grading has happened to us company so far and what it does it allows our you know what the biggest problems in the past you know the company comes on and manufacture does not know who they are, how they got the product etc like I said we are really upfront with our manufactures, like we tell them we sell on Amazon, we are really good at it and now they have to know every individual seller on the listing you know if some guys is an idiot they can chose to stop selling to it. Like he will be allowed to list the product, doesn’t mean that they have to sell to him. It gives them a lot more control of the listing; which really preserves the value of the listing long term.

Like the average line we carry was, we hold around 90 to 92 percent of the products that we still carry from day one. So the long jeopardy of the lines we carry, we imagine it would sell around 96 to 98 percent. Like it’s amazing. We want to make the lines profitable over time so we are super excited about brand grading. A lot of people had trouble with that though you know we really identified like what we need to do to get ungraded with the brand and it all has to do with your letters of authorisation and your invoices. Like all our invoices are direct from manufacturer.

So there some things that still things that Amazon want to see that sometimes they are not there and you have to go back and talk to the manufacturer that hey they realize it’s strange but can you put this on there for me like here’s what I am working for Amazon like hey no problem here we go but yeah it’s kind of frustrating for a lot of people but we are really excited about it.

David Aladdin: Let’s go more into detail, you noticed a product authorization form, do you guys do that with every single manufacturer.

Dan Meadors: It wasn’t necessary and we get a letter of authorization for every single product. We didn’t used to do that but now Amazon can close a listing any time and just be like this brand is now ungraded and we want that letter of authorization on hand to give it graded as fast as possible.

David Aladdin: And so that will get you inside the geek. Right?

Dan Meadors: There’s supplier seller brand information they want to see which usually is either three invoices or a letter of authorization and that will let you inside to sell the product. Like it happens 180 a month, it’s crazy.

David Aladdin: Specially during Christmas so what do you not say to vendors like there’s a lot of good things to say like which qualify for example I’m an Amazon seller.

Dan Meadors: We don’t have that aspect, the things we like to say to the vendors are you know approach conversation to the vendor through different aspects, we ask ourselves two questions and it’s number 1 how can I help you? And number 2 why you should care and it’s like if we get answers to those we don’t actually talk to the vendor. So if you think about it from my perspective it’s easy for everybody as an Amazon seller you know to think about how can I get mine but if you approach from the perspective how can I help you get a lot further so that our mentality is how we can help people and that’s what we are going to talk to.

And that’s what we get accounts because approaching from the perspective that here are some things wrong with your product and I know we can fix, here’s how we are going to fix it, you know to sell your products. People are more compliant to work with you when you are coming from that perspective. I don’t think anyone is off limits if you are approaching it right. The only thing that I would not do at this point is I would not tell . . . like if a vendor asks you to sell on Amazon and you say no and with the intention of selling on Amazon I think you are opening yourself to a lot of liability, so that would be my one thing I wouldn’t say I would say not to do, is don’t lie to them.

David Aladdin: I always think people like people like you take all the good vendors from Amazon but I guess there are thousands and thousands of potential vendors that aren’t even on Amazon right now.

Dan Meadors: Like we don’t even add products to Amazon, like I don’t look for products on Amazon I would legitimately like here is the thing go to an Amazon retail page, look at from your private label guys, private label guys are so good at what we do is silly and the reason is that they have the mindset, they know how to make product sell better on Amazon. Like take your eyes and go look at any detail page on Amazon and if there is something wrong with it like you would be like hey this could be done better, that’s an opportunity for a project for you to carry.

You can identify this product has only two pictures on it like they are there six pictures available like now that’s an opportunity for you to sell that product and for you to become a brand partner.

David Aladdin: Where do you guys see your wholesale, business going?

Dan Meadors: I usually think within the next five years we could do hundred million dollars’ sale per year.

David Aladdin: Ok what kind of warehouse do you need though?

Dan Meadors: I don’t think it’s much bigger than this but I would tell people if I start tomorrow, if I were to restart my business tomorrow I would not have a warehouse, I would have like I would have outsource to prep centres and stuff but we already had the infrastructure, before that I had the infrastructure for warehouse, before I knew prep centre exist like I didn’t know that was the thing, If I knew I would just do it. We used prime zero prep a little bit last year and they did an amazing for us and it was so much easier than having own warehouse and if I did over a million, I would not own warehouse, would have a prep centre.

David Aladdin: I have been like kind of fighting myself back and forth about it because I had quotes from a warehouse provider. It was to store a 40-foot container, it was about 5000 to 7000 totally annually you know they wanted to keep their inventory there. So I don’t know if that’s saving me money or I could figure out my own warehouse location to store their . . .

Dan Meadors: If you are looking at from a storage perspective it might be cheaper to store it in one of those storage units cheaper but are you storing it and ready to ship capacity and things like that. With somebody like that it’s like we don’t and that is another difference with the model to is like we don’t store a lot of inventory. You know I may have like 30 pallets landing this week like come in but we are going to be shipping 30 pallets out. So you know we don’t like cheap back stocks of inventory, generally if we do it is like because they were offering a huge discount, some kind of weird special or something like that but we are really dead sale on ordering. You know we order 30 to 45 days once every inventory at a time.

David Aladdin: If I told you that you would be having 40 shipments coming through your warehouse 5 years ago what would you say to me?

Dan Meadors: It would have been hard to believe honestly, we did knew we wanted to scale our business but we didn’t know, that’s like a disconnect in most people like whenever they start selling on Amazon it’s like, they don’t really realize the amount of infrastructure needed to move from one level to the next level and that’s why starting out with the prep centre is a great thing because that avoids you to having built that infrastructure, because we had to build a long way like it took a lot of money to operate a warehouse, you can just avoid that with a prep centre.

David Aladdin: If it’s possible can you go over a checklist kind of go through for a solid wholesale product? I know we covered it a little bit.

Dan Meadors: Sure, I mean the primary thing is can I sell this product 90 times a month, that’s what the first thing I want to look at is because I care about keeping my money moving and product, I am not a product collector, I want to keep my cash flow as a part of the business. So that’s criteria number 1, criteria number 2 Amazon does not carry this products like I don’t want to carry a product with Amazon unless because . . . Amazon itself doesn’t care of the bilateral so if me and you are carrying a product I can tell you approximately that I am going to sell 50 percent if we’re the same price and you are going to sell 50 percent and that may change by 1 or 2 percent based on if you are a bigger or better seller than me, like you got better matrix, like you may sell 2 percent more than me or 3 percent more but it is going to be really close, right.

Like with Amazon, it doesn’t really share to buy box like even if they do it’s very in-frequent. It takes the perfect initial estimation and makes it very hard to engage what really actually is going to happen. So we don’t carry products with Amazon, the third criteria is we don’t carry private label product and the reason for that is for example if I see your product on Amazon is very unlikely I am going to approach you and it’s because most private label sellers are very investive in their brand and you know particularly in the Amazon space is that they determine themselves to be a private retail label whereas we want to deal with manufactures and brand owners in the truer sense. Like we want our manufacturers and brand owners to focus on the marketing and want to focus on the retail side and we believe that’s how the brands are able to scale and grow.

So, it’s I can’t offer you, to make it more important is you concentrate as a private label seller on being a retailer and I’m not sure that I can be a better retailer than you being but a company whose focusing on the market and things like that like I can be a better retailer than them.

David Aladdin: Cool. Do you guys have eCommerce too or you guys just ship through Amazon and eBay.

Dan Meadors: We have a couple of eCommerce stores too but we don’t do very business out of those at all, this was in our diversification phase when we started building eCommerce stores and stuff but you know we decided it’s actually safer to be just an Amazon seller. You know we tell people hey yes, we have proper offers from Amazon, we have all these websites but I promise you like don’t let that factor in whenever you are selling a product. We are going to do little sales on those that’s not going to matter and I am like okay like we are very upfront what those properties represent.

David Aladdin: Yeah you know that knowledge is very good, someone trying to get into wholesale and thinking about starting a website as well and you know don’t waste so much time on that aspect of the business just because the real money is on the Amazon side of wholesale and that’s cool, we got about ten minutes left, let’s talk about your employees when you got your first employees, what were you guys thinking about there?

Dan Meadors: So we wanted to hire an employee who would handle our processes, to help handle our processing, it was me and Eric at that time and we interviewed like several people and two guys were really, really awesome and then and one of them was going to be a really awesome processing guy and the other one was like he was going to come in and shockingly intelligent, wow, he understands things that, he clearly understands things he shouldn’t be understanding from one conversation.

So we ended up hiring actually both of those guys, we couldn’t afford two employees at that time, we could only afford one but we were like we definitely need the processing guy and if this guy works out, his name is Matt, he is actually still with us, he is incredible, if this guy’s works out our business is going to grow exponentially so we ended up hiring both guys and sure enough like the very first, it was 45 days that Matt was there like a complete waste of money.

He would watch me work as finding as good wholesale accounts our products and they would watch me contact them and then eventually I started watching him do the same work and just replicating that process and then at the end what actually happened was instead of me looking for products and calling all those manufacturers, now we were doing two times a speed because I was doing it and he was doing it. So you can see the jump from 1.28 million to 3.9 million that was it, that’s where we were able to replicate that process.

Then we eventually decided that him looking for products was not profitable task which we can outsource so much cheaper so we started hiring our team in Philippines and now he has a consistent stream of products and all he is doing is, he only talks to the people that tell us no, they don’t want to sell to us, that’s Matt’s job. He talks to them, educates them who we are and how we can help them.

David Aladdin: He is a seller. You think the most important part was actually the product source but in a sense you guys have pushed it even further, you narrowed in the guys that reject because you use product that’s not relatively available to all sellers, you try to get pass that last barrier.

David Aladdin: On a side note, I think I just have to open a secondary seller Amazon account just because I wouldn’t want the wholesale price side by side next to my private label products, well a lot of my customers go through my brand page and if they start seeing I’m selling toothpick will look weird next to my products which are branded, part of my brand so.

Dan Meadors: I mean it’s easy to open like we actually have two accounts because the thing is it adds a lot of value, the thing you are doing now lik